The structure of the statutory residence test
Produced in partnership with Lisa Spearman of Mercer and Hole and Emma Loveday of Wedlake Bell LLP

The following Private Client practice note produced in partnership with Lisa Spearman of Mercer and Hole and Emma Loveday of Wedlake Bell LLP provides comprehensive and up to date legal information covering:

  • The structure of the statutory residence test
  • Scope of the statutory residence test
  • Statutory residence test—basic rule
  • Automatic overseas tests
  • First automatic overseas test
  • Second automatic overseas test
  • Third automatic overseas test
  • Terms used in the automatic overseas tests
  • Automatic UK tests
  • First automatic UK test
  • More...

The structure of the statutory residence test

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 [Archived].

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’,. This may be updated from time to time and is cross-referred to in HMRC’s ‘Guidance Note for residence, domicile and the remittance basis: RDR1’. Information on HMRC’s view on how the legislation should be interpreted, and should be read in conjunction with the legislation, can be found in the Residence, Domicile and Remittance Basis Manual (RDRM)

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