The following Employment Tax guidance note by Tolley in association with Paul Tew provides comprehensive and up to date tax information covering:
This note provides an overview of the statutory residence test (SRT) introduced with effect from 6 April 2013. The SRT sets the ground rules for determining whether an individual is regarded as resident or not resident in the UK for tax purposes. The SRT is still a relatively new concept and, therefore, the experience of tax advisers is limited in comparison to their experience of interpreting the legislation previously in force.
The rules of the SRT are in FA 2013, Sch 45.
The concept of residence is fundamental to UK taxation and to determining whether an item of income is taxable in the UK. Residence is of particular importance when looking at non-UK sources of income because in many situations, a UK resident will be liable to tax on overseas income whereas a non-UK resident will not be. This fact was noted by HMRC when the original consultation document on the proposals for the SRT was issued on June 2011.
Prior to the introduction of the SRT, the concept of residence depended on a mix of case law, limited legislation, and the interpretation of HMRC practice and guidance. The SRT was introduced with the aim of simplifying the previous rules at the same time as producing the same determination of residence for the majority of taxpayers.
The SRT sets out to determine conclusively if an individual is UK resident or non-UK resident for the tax year. An individual will be UK resident for the year if they meet:
•‘at least one of the automatic UK tests; and•none of the automatic overseas tests’
FA 2013, Sch 45, para 5
If none of the automatic tests are met,
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