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Transfer of Residence

The Transfer of Residence regime (ToR) is of particular interest to private individuals or those individuals whose employees are relocating to the UK from outside the EU.

It is a relief from all import duties that facilitates a smooth transition of personal belongings and household effects with minimal customs interference.

Household goods and personal effects owned by a ‘natural person’ (and not a ‘person’ as created by an operation of law such as a trust or a company) are allowed to be transported into the EU without the payment of customs duty and import VAT. There are several specific obligations and many apocryphal tales surrounding importing personal items into the UK. However, this regime, part of a series of customs procedures called: Community System of Duty Reliefs – (CSDR) is exceptionally useful to individuals who regularly move around the globe or own high value art or vehicle collections that they wish to move with them.

By way of example, the ToR regime is invaluable especially when considering that the ad valorem customs duty levied on a vehicle is usually 10% accompanied by an Import VAT uplift of 20%. Further, artwork and antiques, although free of customs duty, still attract a (reduced) Import VAT rate of 5% levied on the item’s value.

A ToR application must be completed either before the goods arrival in the UK or within 12 months of arrival. However, it is prudent to complete a ToR well ahead of any movement of the client’s goods. Otherwise, duty and import VAT may well be charged, and the individual faced with seeking a refund later. Additionally, if HMRC refuse to retro-authorise the client for ToR any amount of duty or VAT cannot be subsequently reclaimed.

There are a number of prerequisites to qualify for ToR and clients must be sure they meet all if the criteria to ensure success:

  • Be moving from a country outside the EU to the UK to live as their normal place of residence. Hence, transferring the place the client usually lives (for customs purposes) to the UK;
  • Have lived outside the EU for at least 12 consecutive months;
  • Have used and had possession* of the goods for at least the last six consecutive months;
  • Have used the goods and are going to continue using them in the new place of residence in the UK for at least 12 months;
  • Be bringing in their goods within 12 months of coming to live in the UK;
  • Not lend, pledge, give away, hire to others or transfer the goods within the first 12 months.

* EU regulations define ‘possession’ as an item that an applicant has ‘to have’ rather than simply ‘to own’. Therefore, eligible goods are those items that are the individual’s household effects and personal property and are for their own private use.

Unfortunately, ToR relief does not apply to alcohol. Therefore, individuals with wine or spirit collections purchased outside the UK maybe faced with paying duty on the items to relocate them to the UK or disposing of them before departure.

Additionally, if the items were originally removed from the UK proof maybe required as to whether the correct amount of duty was paid at first entry or at purchase. But helpfully, in this case another CSDR could be used entitled Returned Goods Relief.

For more information, please contact Simon Sutcliffe.

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