Also known as:
- statutory residence test
- SRT
Residence for individuals in a nutshell
Residence determines whether an individual is liable to UK income tax, capital gains tax and inheritance tax. Residence must be decided on a year-by-year basis and is usually determined by where the individual lives during the year.
A UK resident is taxable on their worldwide income and gains. The exception to this is where the individual is not domiciled or deemed domiciled in the UK, in which case they may use the remittance basis to ensure that they are only taxed in the UK on their foreign income and gains to the extent that these are brought to the UK. A non-UK resident is not taxed in the UK on their worldwide income, only on their UK source income.
An individual is:
- UK resident ― if:
- any of the automatic UK tests are met and none of the automatic overseas tests are met, or
- none of the automatic UK tests are met, none of the automatic overseas tests are met but the sufficient ties test is met
- UK non-resident ― if:
- any of the automatic overseas tests are met, or
- none of the automatic UK tests are met, none of the automatic overseas tests are met and the sufficient ties test is not met
What are the automatic overseas tests?
The automatic overseas tests should be considered first, as if the any of these are met an individual cannot be UK resident.
There are five automatic overseas tests, which are that the individual:
(1) was resident in the UK for one or more of the previous three tax years and is present in the UK for fewer than 16 days in the current tax year
(2) was not resident in the UK for all of the previous three tax years and is present in the UK for fewer than 46 days in the current tax year
(3) meets the working abroad test, where the individual works over 35 hours per week averaged over the tax year, has no significant breaks from work of at least 31 continuous days, spends no more than 30 days working in the UK in the tax year and is present in the UK for fewer than 91 days in the tax year
(4) dies in the tax year having spent fewer than 46 days in the UK and was not resident in the UK in both of the two previous tax years
(5) dies in the tax year and would have been treated as meeting the working abroad test if the conditions were modified to take into account the death (and conditions are met as to their residence status in the previous two years)
What are the automatic UK tests?
There are four automatic UK tests, which are that the individual:
(1) is present in the UK for 183 days or more in the tax year
(2) has a ‘home’ in the UK for all or part of the tax year, the individual is present in that UK home for at least 30 days in the tax year and there is at least one period of 91 consecutive days (of which at least 30 fall in the tax year) in which the individual had no home overseas or was present in an overseas home for fewer than 30 days in the tax year
(3) meets the working in the UK test, in which the individual works over 35 hours per week as averaged over a 365 day period (of which at least one day falls in the tax year), has no significant breaks from work and works for more than three hours in the UK for more than 75% of the working days
(4) dies in the tax year, has a home in the UK and was resident in the UK for the previous three tax years (and the immediately preceding year was not a split year)
What is the sufficient ties test?
Under the sufficient ties test, the individual’s connecting factors with the UK must be taken into account along with the number of days spent in the UK in the tax year.
The connecting factors are:
- family ― the individual’s spouse / civil partner / common law partner / minor children are resident in the UK
- accommodation ― the individual has accessible accommodation in the UK and makes use of it during the tax year (see below)
- work ― the individual does at least 40 days work in the UK in the tax year
- UK presence in previous tax years ― the individual spent more than 90 days in the UK in either or both of the previous two tax years
- more time in the UK than in other countries ― the individual spends more days in the UK in the tax year than in any other single country (this connecting factor only needs to be considered in relation to ‘leavers’)
| | Not UK resident in any of the three preceding tax years (‘arrivers’) | Resident in the UK for one or more of the three preceding tax years (‘leavers’) |
Fewer than 16 days | Non-resident | Non-resident |
16–45 days | Non-resident | Resident if four or more connecting factors |
46–90 days | Resident if four connecting factors | Resident if three or more connecting factors |
91–120 days | Resident if three or more connecting factors | Resident if two or more connecting factors |
121–182 days | Resident if two or more connecting factors | Resident if one or more connecting factors |
183 days or more | Resident | Resident |