The Statutory Residency Test
Understanding the Statutory Residence Test (SRT)
The Significance of the SRT for Expats
Four Fundamental Elements of the Statutory Residence Test
1. Days Spent in the UK During a Tax Year
2. Automatic Overseas Tests
3. Automatic UK Tests
4. Sufficient Ties Test
In basic terms, you will be classified as a non-UK resident for tax purposes if you satisfy the Automatic Overseas Test and do not pass the Automatic UK or Sufficient Ties Tests. Specifically, you will be considered a UK resident if you spend more than 183 days in the UK during a tax year. However, due to HMRC’s specific rules, determining the number of days spent in the UK can be challenging.
Automatic Overseas Tests
You are considered a non-UK resident if you meet any of the following conditions:
1. You were a UK resident in one or more of the previous three tax years but spent fewer than 16 days in the UK during the current tax year.
2. You were not a UK resident in any of the previous three tax years and spent fewer than 46 days in the UK during the current tax year.
3. You work full-time overseas, spend at most 91 days in the UK, and work fewer than 31 days for more than three hours per day in the UK.
Automatic UK Tests
If the Automatic Overseas Tests do not apply, the following criteria determine UK residency:
1. You spend 183 days or more in the UK during the tax year.
2. You have a home in the UK and spend 91 consecutive days, including at least 30 days in the tax year.
3. You work full-time in the UK for 365 days without significant breaks.
Sufficient Ties Test
If your residency status still needs clarification, the Sufficient Ties Test considers the number of connections you have to the UK. The number of ties you need to establish residency depends on whether you are an “arriver” or a “leaver.”
– Arriver: Someone who was not a UK resident in any of the previous three tax years.
– Leaver: Someone who was a UK resident in one or more of the previous three tax years.
The number of ties required also depends on the number of days spent in the UK during the tax year.
For Arrivers:
– Less than 46 days: Automatically non-resident.
– 46-90 days: Resident if 4 ties.
– 91-120 days: Resident if 3 ties.
– 121-182 days: Resident if 2 ties.
– Above 183 days = Resident
For Leavers:
– Less than 16 days: Automatically non-resident.
– 16-45 days: Resident if 4 ties.
– 46-90 days: Resident if 3 ties.
– 91-120 days: Resident if 2 ties.
– 121-182 days: Resident if 1 tie.
– Above 183 days = Resident
The ties considered are:
Family ties: (e.g., a spouse or minor children living in the UK)
Accessible accommodation: In the UK (excluding hotels)
Work ties: Working in the UK for at least 40 days (more than three hours per day)
90-day tie: Spending more than 90 days in the UK in either of the two previous tax years
Country tie: Spending more time in the UK than any other country during the tax year
For the best The diagram I can find online click the link below:
https://www.rl360adviser.com/generic/downloads/tech009.pdf
Significance of the Statutory Residence Test for Non-Domicile Individuals
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