1. Introduction

To see if you are UK resident (from 2013/14 onwards) you need to work through a series of sequential tests based on the Statutory Residence Test rules which took effect from 6 April 2013.

You are essentially present in the UK if here at midnight. Thus, for someone arriving on Friday and leaving on Monday, they would have Friday, Saturday and Sunday as days spent in the UK, but not the Monday.

A day in the UK may be disregarded if there are exceptional reasons for your presence, but subject to a maximum of 60 such days per tax year.

In addition, the basic rule for disregarding a day in the UK where you do not spend the night here when counting the number of days you spend in the UK is subject to an anti-avoidance rule. This is designed to catch people who make frequent short visits back to the UK and applies where individuals:

  • have been a UK resident in at least one of the preceding three tax years;
  • have three or more ties to the UK in the tax year; and
  • are present in the UK but leave before midnight on more than 30 occasions during the year.

Where these conditions are met, the midnight rule will generally be overridden so that from and inclusive of the 31st occasion on which you are present in the UK but leave before midnight, all days on which you are present here for any length of time will count as UK days.

1. Automatic Overseas/Non-UK Resident Tests

First, you are definitely not UK resident for a tax year if you meet one or more of the following 3 tests:

a) Present in the UK for less than 16 days (regardless of your previous pattern of UK residence);

b) Present in the UK for less than 46 days and were not resident in the UK in any of the 3 previous tax years;

c) You meet the “sufficient hours” working overseas tests. This is essentially more than 35 hours a week but if this section is relevant see next. An individual will be non-UK resident for a given tax year if ALL four of the following conditions are satisfied:

  • You work “sufficient hours” overseas. The legislation sets down a prescriptive methodology to establish whether, after adjusting the 365 day averaging period (366 days If a leap year) by subtracting certain days (broadly UK workdays, reasonable holiday leave, reasonable sick leave and parenting leave), over 35 hours a week on average have been worked overseas.
  • There are no “significant breaks” from overseas work. A “significant break from overseas work” is defined as a continuous period of 31 days or more during which you:
    (i) are not simply absent from work because of annual leave, parental leave or illness; and
    (ii) do not work for more than 3 hours overseas per day.
  • The number of UK workdays in the tax year is fewer than 31. This means that you could spend up to 30 working days in the UK carrying out substantive duties and still qualify.
  • You are present in the UK for fewer than 91 days in the tax year. When considering this test, both UK workdays and days of UK presence (UK days) have to be taken into account.

The two definitions of workday and UK day are quite separate:

  • A UK workday is a day on which more than 3 hours of work is carried out in the UK (work includes incidental and non-incidental duties and most business travel and training).
  • A UK day is one on which the individual is in the UK at midnight. The anti-avoidance provision described in the introduction above does not apply, and days where the transit exemption applies, or where presence has resulted from exceptional circumstances are disregarded.

It will be clear that a day can count as a UK workday and not be a day of UK presence and vice versa.

Careful record keeping will be necessary.

Within specified limits the test allows you to carry out substantive duties in the UK without jeopardising your non-UK residence status. Remuneration related to the performance of non-incidental duties in the UK remains, however, fully liable to UK Income Tax. This test does NOT apply to someone who:

  • has a relevant job on board a vehicle, aircraft or ship at any time in the tax year; and
  • makes at least 6 job related trips involving cross border travel (i.e. ones that begin or end in the UK)

There are two more tests which need to be looked at in the event of dying whilst in the UK but these are not covered here.

If you do not meet one or more of these three main test, so you are not automatically non-UK resident, you need to move on to the second series of tests in 3. below.

2. Automatic UK Resident Tests

You are automatically treated as UK resident if one or more of the following tests are met:

a) You are present in the UK for 183 days or more;

b) Your only substantive home is in the UK. For the purpose of the SRT rules, a home is a building or structure which an individual uses with a sufficient degree of permanence or stability to count as a home. A place that is used as a home will remain a home even if it is temporarily unavailable, for example, because of damage or renovation or is not lived in for a period of time whilst overseas. A property that you rent or in which you live/stay (say with parents, another member of family or others) will be a home if you use it as your home.

You will be caught by this rule and treated as having a UK home in a tax year in which:

  • you have at least one UK home where you spend at least 30 days (such days do not need to be consecutive and partial days count); AND
  • there is at least one period of 91 consecutive days (at least 30 days of which must fall within the tax year) during which you have a home in the UK AND do not have a “substantive home overseas”.

A “substantive home overseas” is one in which the individual has spent at least 30 days during the tax year. Days need not be consecutive, and for these purposes presence at any point during the day will count.

Where you have more than one home overseas, you must be present in at least one of the homes for at least 30 days. As such, presence in two foreign homes for only 25 days each would not qualify.

To avoid being UK resident because of this test, you either have to ensure you:

  • do not spend 30 days in a UK home; or
  • retain a “substantive home overseas”

throughout the tax year concerned.

There is a trap, if you have a UK home and dispose of your only qualifying foreign home without acquiring another within three months (91 days). There will be cases where the split year rules will not provide adequate relief (though if you are dual resident, treaty relief may be available). Given the complexity of these provisions, in cases where the inadvertent acquisition of UK residence status would have materially adverse tax consequences for you, specific advice should be sought BEFORE any changes are made.

c) You work sufficient hours in the UK, which is 35 hours a week on average.

Again there is another test if you die whilst in the UK.

3. Tie Breaker Tests

If based on the above two series of tests and the facts, you are neither automatically non-UK resident or UK resident, you must then proceed to consider the tie breaker tests.

Your residence status is determined by considering the number of days spent in the UK in relation to the number of defined “UK ties” you have.

The rules are stricter for leavers (those who were UK resident in one or more of the three preceding tax years) than for arrivers (all other individuals).

The five UK ties are:

(i) the “family” tie – you have a UK resident partner and/or UK resident minor children;

(ii) the “accommodation” tie – a place to live. For this purpose, any accommodation that is available for your use while you are in the UK must be available to you for a continuous period of at least 91 days during the tax year and must actually be used by you for at least one night during the tax year. The main difference between the term ‘home’ for SRT purposes and available accommodation is that accommodation can be transient and does not require the degree of stability or permanence that a home does.

Accommodation is regarded as available to you for a continuous period of 91 days if:

  • you are able to use it; or
  • it is at your disposal, at all times throughout that period; or
  • If there is a gap of less than 16 days between periods when accommodation is available, the gap period is ignored and accommodation is regarded as being available throughout. Note that this could mean that staying in the same hotel regularly for a few weeks over a regular 91 day period (say for the first three weeks of June, July, August, and September), could mean you have an accommodation tie.

If a relative were to make their home available to you casually, for a social visit, say, it will not mean that the accommodation would be regarded as being available to you. However, if it is available to you for a continuous period of 91 days and you use it casually, it will be a tie.

Similarly, a casual offer from a friend to “stay in my spare room any time” will not constitute an accommodation tie unless your friend really is prepared to put you up for 91 days at a time (whether he actually does so or not).

The rule is slightly different if you stay at the home of a close relative (which means parent, grandparent, brother, sister and child or grandchild aged 18 or over (whether or not they are blood relatives, half-blood relatives or related by marriage or civil partnership). Child includes any adopted children. If you stay with a close relative, the accommodation will be an accommodation tie if you spend at least 16 nights there in any one tax year (as opposed to just 1) and it is available to you for a continuous period of at least 91 days;

(iii) the “work” tie – at least 40 UK working days in the tax year;

(iv) the “90-day” tie - more than 90 days of UK presence in either or both of the two preceding tax years); and

(v) the “country” tie - broadly, spending more midnights in the UK than in any other single jurisdiction. However, this test only applies to leavers

A tie counts if it subsists at any point during the tax year.

The number of days you can spend in the UK without being UK resident depends on the number of UK ties.

The rules allow “leavers” fewer UK days than “arrivers” if UK residence is to be avoided per the following table:

Sufficient Ties Table

Days spent in UK

Arrivers

Leavers

Fewer than 16

Always non-resident

Always non-resident

16 - 45

Always non-resident

4 UK ties - UK residence

46 - 90

4 UK ties = UK residence

3 UK ties = UK residence

91 - 120

3 UK ties = UK residence

2 UK ties = UK residence

121 - 182

2 UK ties = UK residence

1 UK tie = UK residence

183 days or more

Always UK resident

Always UK resident


If, for example you are someone who arrives in the UK but do not want to become resident here, you could have two ties with the UK (say (ii) accommodation and (iv) more than 90 days spent in the UK), and per the above table, you could spend up to 120 days maximum in the UK without being treated as UK resident. (Note that this is more days than under the old rules which allowed up to 90 days on average over a four year period). However, if you have a third tie as well, you could only spend up to 90 days here to remain non-UK resident.

If you spend more time in the UK than in any other country, this test is only relevant if you are leaving the UK, not if you are arriving in the UK.

Transitional provisions

The SRT came into force from 6 April 2013 and does not apply to determine residence in any prior tax year. However, when applying the test (or deciding upon eligibility for split year treatment), it may be necessary to determine your residence status for a tax year prior to 2013/14. Where this is the case, an irrevocable written election may be made for tax years 2013/14 to 2017/18 to determine “residence” with respect to 2010/11 to 2012/13 as if the SRT had applied. The deadline for the election is one year after the end of the relevant tax year. The election can be made either on your tax return or in a standalone letter to the your HMRC office.

This election is effective only in relation to determining your residence status for 2013/14 onwards, and will have no impact on actual taxable status for those earlier years, which still have to be determined according to the former, uncertain, principles. Some commentators have expressed concern that use of the election might be seen by HMRC as an indication that you are not confident of your residence status under the current law. Whether or not this will be the case, there will be situations where the election should be considered, for example:

  • Where non-residence status in earlier years is not important (as the tax at stake may be insignificant when double tax relief is considered) but residence status for 2013/14 to 2017/18 is important, and you want certainty for these later years.
  • Where you are resident in the UK for the pre-commencement tax years (2010/11, 2011/12 and/or 2012/13), but would not have been had the SRT been in force.

We see no benefit to making the election where your tax residence status for the years 2010/11 to 2012/13 would be significant and you would not be treated as UK resident in these earlier year whether applying either the old or new rules.

This fact sheet is for information only. It provides an overview of the regulations currently in force and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore, no responsibility for loss occasioned by any person or refraining from action as a result of this material can be accepted by the authors or the firm.