Residency

Residency test

The UK’s first formal tax residency test for individuals known as the statutory residence test (SRT) took effect on 6 April 2013. It should now be possible to determine definitively whether a person is tax resident in the UK for a tax year by applying a series of detailed legislative tests.

Under the basic rule, an individual is treated as UK tax resident for a tax year if:

1. •

   the automatic UK residence test, or

2. •

   the sufficient ties test

is met for that year.

However, if an individual satisfies at least one of the automatic overseas tests, the individual is not UK tax resident for that tax year. The automatic overseas test takes priority over the automatic UK residence and sufficient ties tests.

The sufficient ties test is only relevant if none of the automatic UK tests and none of the automatic overseas tests are satisfied.

Determining if an individual is UK tax resident is therefore a process that can have up to four stages, as follows:

1. •

   first, to consider whether the individual spent 183 days or more in the UK in the tax year (the