Ordinary Residence

Overview

Ordinary residence is a legal and tax concept determining where an individual is considered to be habitually living. It’s not simply about physical presence but about a settled intention to make a place one’s home for an indefinite period. This status has significant implications for taxation, social security, and legal jurisdiction.

Key Concepts

Several factors contribute to establishing ordinary residence:

• Habitual living: The regularity and continuity of presence in a location.
• Intention: A genuine desire to make a place one’s home for the foreseeable future.
• Duration: While not fixed, a significant period of time often indicates ordinary residence.
• Connections: Links such as family, employment, property ownership, and social ties.

Deep Dive: Ordinary Residence vs. Domicile

It’s important to distinguish ordinary residence from domicile. Domicile is a more complex concept, often acquired at birth and retained indefinitely, representing a permanent home. One can be ordinarily resident in a country without being domiciled there, and vice versa. For example, a student studying abroad may be ordinarily resident in their new country but retain their domicile of origin.

Applications

The concept of ordinary residence is applied in various contexts:

• Taxation: Determines liability for income, capital gains, and inheritance taxes in a particular jurisdiction.
• Immigration: Can affect visa requirements, residency rights, and access to public services.
• Social Security: Influences eligibility for state benefits and contributions.
• Legal Jurisdiction: May determine which country’s laws apply in disputes.

Challenges & Misconceptions

Determining ordinary residence can be complex, as it’s subjective and fact-dependent. Common misconceptions include equating it with:

• Mere physical presence for a short duration.
• Temporary stays, even if extended.
• Having a visa or work permit alone.

Each case is assessed on its unique circumstances and the individual’s intent.

FAQs

What is the primary test for ordinary residence?

The primary test involves examining the habitual abode and the intention to reside indefinitely.

Can you be ordinarily resident in more than one country?

Generally, an individual can only have one place of ordinary residence at any given time, though temporary splits might occur during transitions.