Whether you are resident in the UK for tax purposes is determined by the Statutory Residence Test (in force since April 2013).
At its most simple, if you spend 183 or more days in the UK during a tax year (6 April – 5 April) you will automatically be UK resident. If you have not been in the UK for 183 days, you will still be UK resident for a tax year if:
- You do not meet any of the automatic overseas tests;
- You meet one of the automatic UK tests or you meet the sufficient ties test.
Automatic overseas tests
The three main automatic overseas tests are as follows:
- You will be non-UK resident for the tax year if you were UK resident for one or more of the previous three tax years and you spend less than 16 days in the UK in the current year.
- You will be non-UK resident for the tax year if you were UK resident for none of the previous three tax years and spend less than 46 days in the UK in the current year.
- You will be non-UK resident for the tax year if you work full-time overseas in the tax year.
If any of the above tests are satisfied, you will not be UK resident for that tax year. If they are not satisfied, the automatic UK tests and sufficient ties tests need to be considered.
Automatic UK tests
The three main automatic UK tests are as follows:
- As noted, you will be UK resident if you spend 183 or more days in the UK in the tax year.
- You will be UK resident if, for a prescribed part of the tax year, your only home is in the UK.
- You will be UK resident if you work full time in the UK in the tax year.
If you meet none of the automatic overseas tests, and none of the automatic UK tests, then the sufficient ties test comes into play.
Sufficient ties test
There are five UK ties, these being as follows:
- Family tie – your spouse, cohabitee or minor child is UK resident in the tax year.
- Accommodation tie – you have a place to live in the UK available to you in the tax year.
- Work tie – you work for more than three hours a day for 40 days or more in the tax year.
- 90 day tie – you have spent more than 90 days in the UK in at least one of the previous two tax years.
- Country tie – you spend more days in the UK in a tax year than in any other country (but this only applies if you were UK resident in one of the previous three tax years).
The ties have many accompanying tests and rules that need to be worked through carefully according to your individual circumstances each year. The number of ties that you meet, will determine the number of days you can spend in the UK in a tax year on a tiered basis before you become a UK resident.
For the sufficient ties test, a distinction is drawn between “arrivers” (individuals who have not been UK resident in any of the previous three tax years) and “leavers” (who have been UK resident in one or more of the previous three tax years).
Arrivers
| Days spent in the UK | Number of UK ties |
| Less than 46 days | Always non-resident |
| 46-90 days | Resident if have 4 UK ties |
| 91-120 days | Resident if have 3 UK ties |
| 121-182 days | Resident if have 2 UK ties |
| 183 days or more | Always resident |
Leavers
| Days spent in the UK | Number of UK ties |
| Less than 16 days | Always non-resident |
| 16-45 days | Resident if have 4 UK ties |
| 46-90 days | Resident if have 3 UK ties |
| 91-120 days | Resident if have 2 UK ties |
| 121-182 days | Resident if have 1 UK tie |
| 183 days or more | Always resident |
What does this all mean?
Non-UK residents are only liable to pay Income Tax on their UK source income and Capital Gains Tax on gains realised on disposals of UK land or certain interests in UK land.
On the other hand, subject to the application of the remittance basis, UK residents are liable to pay Income Tax on their worldwide income and Capital Gains Tax on their worldwide gains.
If you become UK resident, you will be treated as UK resident for the entire tax year, unless split year treatment applies.
Split year treatment allows you to be treated as UK resident for only part of the tax year (either before or after your arrival). Whilst it can be beneficial, split year treatment is not always available and even if it is available, it does not apply to all types of income and gains.
You will appreciate from this that a thorough understanding of the Statutory Residence Test and its application to you is fundamental if you are to make a proper assessment of your exposure to UK tax.
The good news is that, although its application can be complicated and it is not without its traps, in almost all cases, the Statutory Residence Test operates to give you a binary answer to your UK residence position for any given tax year.
This provides you, as the taxpayer, with the ability to proceed with certainty and to plan with confidence – the last thing you want to do is to fall into UK residence by accident. So long as proper attention is paid to the Statutory Residence Test it should be possible to avoid this.
Think ahead, take professional advice and plan accordingly.
