Statutory residence test

Produced by Tolley in association with Paul Tew

The following Employment Tax guidance note Produced by Tolley in association with Paul Tew provides comprehensive and up to date tax information covering:

  • Statutory residence test
  • Why residence matters
  • The basic concepts
  • The automatic tests
  • The automatic tests in detail
  • Sufficient working hours
  • The sufficient ties test
  • Key concepts
  • Days spent in the UK
  • Location of work
  • More...

Statutory residence test

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.

Why residence matters

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. See the Residence and domicile ― effect on tax liability guidance note. 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. See the Determining residence status (pre 2013/14) guidance note. 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.

Note that there may be a need to look at the pre 2013/14 rules in order to determine residence in those tax years where it is relevant to the individual’s tax position today, eg deciding whether the individual is deemed domiciled in the UK. See the Deemed domicile for income tax and capital gains tax (2017/18 onwards) guidance note.

The basic concepts

The SRT sets out to determine conclusively if an individual is UK resident or non-UK resident for the tax year. An individual is UK resident for the year if they meet:

  1. at least one of the automatic UK tests, and

  2. none of the automatic overseas tests

FA 2013, Sch 45, Part 1, para 5

If none of the automatic tests are met, the individual then needs to consider

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