• news-banner

    Expert Insights

The statutory residence test

Residence is a hugely important concept for the taxation of individuals, as it has a profound effect on whether, and to what extent, they are subject to tax. This note summarises the complex rules which apply to determine residence for UK tax purposes.

Background

Prior to 6 April 2013, the rules for determining whether an individual was resident in the UK for tax purposes were largely based on cases decided around a hundred years ago. These cases had become hard to apply in practice, particularly given increases in international mobility. It was therefore difficult in some situations for an advisor to give a conclusive view on whether a client was, or was likely to become or remain, UK resident.

In response to this problem, the UK government introduced a statutory residence test (the SRT), which has been in force since 6 April 2013.  The SRT is in some respects an improvement on the old rules, since it can be used to determine with much greater certainty when an individual will be regarded as UK resident.  In particular, it avoids ambiguities under the old rules about what a UK resident individual needs to do, in terms of spending less time in the UK and/or severing links to the UK, to become non-UK resident. However, aspects of the SRT are hugely complicated, and the tests can be very difficult to apply in practice.

Structure of the SRT

The SRT determines residence status on a tax year by tax year basis.  UK tax years run from 6 April one calendar year to 5 April the next. Under the SRT, an individual may be:

  • conclusively non-UK resident, if certain conditions are met; or
  • conclusively UK resident, if certain other conditions are met.

If the individual does not meet the conditions to be treated as conclusively resident or non-resident, his/her status is determined by the so-called ‘sufficient ties’ test.  This takes into account whether the individual has been UK resident in previous tax years, the number of days he/she has spent in the UK in the relevant tax year, and the number of ‘ties’ to the UK that he/she has in the relevant tax year.

The residence tests: a simplified summary

1. The test for 'conclusive' Non-UK Residential Status 
Resident in any of the three preceding tax years? The individual is non-UK resident if…
No Fewer than 46 days in the UK
Yes Fewer than 16 days in the UK

Full-time work outside the UK

The individual is non-UK resident if in the tax year all of the following conditions are met:

  • he/she works ‘sufficient hours’ outside the UK (35 hours or more a week on average);
  • there are no significant periods (of 31 consecutive days or more) in which he/she spends less than three hours working outside the UK (or in which does not do any work outside the UK);
  • there are no more than 30 days on which he/she does more than three hours’ work in the UK; and

his/her days in the UK (whether working or otherwise) do not exceed 90.

If none of the above conditions are met, then go on to…

 

2. The tests for ‘conclusive’ UK Resident Status
The individual is UK resident if spends 183 days or more in the UK

Sole/main home in the UK

The individual is UK resident if:

  • he/she has a home in the UK in all or part of the tax year;
  • he/she is present at that home on at least 30 days in the tax year (not necessarily at midnight); and
  • there is a period of 91 consecutive days (at least 30 days of which are in the relevant tax year) in which either: 

(a) the individual has no home outside the UK; or 

(b) he/she does have a home outside the UK, but in the relevant tax year is present at the non-UK home on fewer than 30 days.

Full-time work in the UK

The individual is UK resident if, in a 365 day period which overlaps to some extent with the tax year:

  • he/she works ‘sufficient hours’ in the UK (35 hours or more a week on average); and
  • there are no significant periods (of 31 consecutive days or more) in which he/she spends less than three hours working in the UK (or in which he/she does not do any work in the UK).

If none of the above conditions are met, then go on to…

3. The ‘sufficient ties’ test for UK residence
Relevant ties:
  • Work tie: Applies if the individual works for more than three hours in the UK on 40 or more days in tax year (whether continuously or intermittently).
  • Family tie: Applies if the individual has a spouse/civil partner/cohabitee/minor child who is resident in the UK.
  • Accommodation tie: Applies if the individual has a place to live in the UK which is available for his/her use for a continuous 91 day period, and he/she spends at least one night there in the tax year.
  • 90 days tie: Applies if the individual spent more than 90 days in the UK in either or both of the previous two tax years.
  • Country tie (only applies to individuals who were UK resident in one or more of the preceding three tax years): Applies if the individual spends more days in the UK than in any other country, in the tax year.
Resident in any of the three previous tax years? Yes No
Number of days in the UK required for residence (or permitted if residence is to be avoided):
With 4 or more ties 16 (15) 46 (45)
With 3 ties 46 (45) 91 (90)
With 2 ties 91 (90) 121 (120)
With 1 tie 121 (120) 183 (182)

 

Key terms
Day Generally, this means any day on which the individual is physically present in the UK at midnight. In general, days on which the individual is present in the UK are not counted if the individual is not present in the UK at midnight. However, there is an anti-avoidance rule which applies in certain circumstances, in which case a day on which an individual is physically present in the UK at any point, even if not at midnight, will be counted.
Home This means a dwelling used with a sufficient degree of permanence to be regarded as a home, which can include a property occupied under a short-term tenancy. A home can be a property owned by some other person, e.g. one owned by a company or trust. The concept of a home differs from the concept of accommodation, which is even broader, and can include a hotel, if the same hotel is used for an extended period.

Our thinking

  • Women in Leadership: Planning for the future

    Sarah Wigington

    Events

  • Planning and Life Sciences: the challenges and opportunities in the Golden Triangle

    Sophie Willis

    Quick Reads

  • Personnel Today quotes Rose Carey on Italy’s new digital nomad visa

    Rose Carey

    In the Press

  • Essential Intelligence – UAE Fraud, Asset Tracing & Recovery

    Sara Sheffield

    Insights

  • IFA Magazine quotes Julia Cox on the possibility of more tax cuts before the general election

    Julia Cox

    In the Press

  • ‘One plus one makes two': Court of Protection finds conflict of interest within law firm structure

    Katie Foulds

    Insights

  • City AM quotes Charlotte Duly on Tesco’s Clubcard rebrand after losing battle with Lidl

    Charlotte Duly

    In the Press

  • Michael Powner writes for Raconteur on AI and automating back-office roles

    Michael Powner

    In the Press

  • Arbitration: Getting value for your money

    Daniel McDonagh

    Insights

  • Portfolio Adviser quotes Richard Ellis on the FCA's first public findings against former fund manager Neil Woodford

    Richard Ellis

    In the Press

  • eprivateclient quotes Sally Ashford on considerations around power of attorney

    Sally Ashford

    In the Press

  • Michael Powner and Sophie Rothwell write for Law360 on anti-bias protection

    Michael Powner

    In the Press

  • Computer says No - my prediction of UK border chaos on Wednesday 1 January 2025

    Paul McCarthy

    Quick Reads

  • Providing pro bono support on social housing issues

    Susan Field

    Insights

  • Charles Russell Speechlys Partner Promotions 2024

    Bart Peerless

    News

  • Has a new route to recovery opened up for victims of banking payment frauds?

    Katie Bewick

    Insights

  • Charles Russell Speechlys boosts its Real Estate offering with the arrival of Kim Lalli and Rafe Courage

    Kim Lalli

    News

  • Cosmopolitan quotes Sarah Jane Boon on how to deal with break-up admin

    Sarah Jane Boon

    In the Press

  • Property Patter: Building and Fire Safety Miniseries - part 1

    Michael O'Connor

    Podcasts

  • Sex discrimination at work

    Michael Powner

    Insights

  • Daniel Sullivan writes for Law360 on hundreds of 'rogue filings' being lodged via Companies House and advice for affected banks

    Daniel Sullivan

    In the Press

  • The Financial Times, The Guardian and City AM quote Sophie Dworetzsky and Dominic Lawrance on Labour’s proposed tax crackdown on non-doms

    Sophie Dworetzsky

    In the Press

  • London’s Knowledge Clusters: From Emerging to Maturing – Start Ups on the Global Stage?

    Lynsey Inglis

    Quick Reads

  • Britain's most successful female Olympian has retired at 31, but how does the Family Court treat (early) retirement?

    Matt Foster

    Quick Reads

  • Fashion and the Green Claims Code brought into focus by open letter from the CMA.

    Ilona Bateson

    Quick Reads

  • How the abolition of Multiple Dwellings Relief affects Build to Rent

    William Marriott

    Quick Reads

  • Will new powers at Companies House stop or slow down fraudsters?

    Peter Carlyon

    Quick Reads

  • Charles Russell Speechlys hosts international arbitration event in Dubai

    Peter Smith

    Quick Reads

  • It’s not just a High Court decision, it’s a successful M&S High Court Decision

    Sophie Willis

    Quick Reads

  • 'Saltburn': How the Catton family could have protected the Saltburn estate and could Oliver's inheritance still be contested? (Part 2)

    Grace O'Leary

    Quick Reads

  • 'Saltburn': How the Catton family could have protected the Saltburn estate and could Oliver's inheritance still be contested? (Part 1)

    Grace O'Leary

    Quick Reads

  • The ongoing fight against fakes

    Charlotte Duly

    Quick Reads

  • Beware of not obtaining a court order when settling your finances

    Julia Mauricio

    Quick Reads

  • Planning essentials case update: when can an enforcement notice against an unlawful use also require the removal of related structures?

    Sadie Pitman

    Quick Reads

  • Vulnerable elders : a harrowing story and the lessons which need to be learnt

    Sarah Wray

    Quick Reads

  • Digital Markets, Competition and Consumers Bill: Will new consumer protection rules restrict access to Gift Aid?

    Quick Reads

  • Home buyers and sellers hit by cyber-attack

    William Marriott

    Quick Reads

  • International Relocation: The Parent Trap 25 years on ...

    Joshua Green

    Quick Reads

  • Autumn Statement provides little comfort for farmers and landowners

    Hannah Connors

    Quick Reads

  • Top Tips to Building your Brand - Women in Chancery

    Katelyn Silver

    Quick Reads

Back to top