The structure of the statutory residence test
The structure of the statutory residence test

The following Private Client guidance note provides comprehensive and up to date legal information covering:

  • The structure of the statutory residence test
  • Scope of the statutory residence test
  • The basic rule
  • Automatic overseas tests
  • Automatic UK tests
  • Sufficient ties test

Produced in partnership with Lisa Spearman of Mercer and Hole and Emma Loveday of Wedlake Bell LLP

The UK’s first formal tax residency test for individuals known as the statutory residence test (SRT) took effect on 6 April 2013. Before this, whether an individual was tax resident in the UK was determined by a combination of case law, practice and HMRC guidance, which led to many uncertainties—see Practice Note: Residence before 6 April 2013.

This Practice Note:

  1. sets out the key elements of the SRT, and

  2. outlines:

    1. the basic rule

    2. the automatic overseas tests

    3. the automatic UK tests, and

    4. the sufficient ties test

This Practice Note, and the further Practice Notes on the SRT, are only a summary and are not comprehensive. As with any new law, there will inevitably be areas where an interpretation is debatable or where a given situation does not appear to be in the consideration of the draftsmen, so reference should always be made to the primary legislation. Detailed guidance on the legislation has been issued by HMRC entitled 'Guidance note: Statutory Residence Test (SRT)—RDR3', the most recent version of which is dated December 2013. This may be updated from time to time and is is cross-referred to in HMRC’s Guidance Note 'Residence, Domicile and the Remittance Basis (RDR1)'. It may be incorporated into the Residence, Domicile and Remittance