Statutory resident? What you need to do to find out

The Statutory Resident Test (SRT) explained by Kathleen Parker FCCA.

From 6 April 2013, the Statutory Resident Test has been used to help individuals determine if they’re resident in the UK for tax purposes, namely but not exclusively for; income tax, capital gains tax and where relevant; corporation tax and inheritance tax.

The SRT consists of three key tests:

• Automatic tests of non residence – the amount of time those who live overseas have spent in the UK
• Automatic tests for residence – the amount of time an individual living in the UK has spent in the UK
• Individual ties to the UK – the extent of the ties you have to the UK and length of time spent in the UK.

Each tax year is to be considered separately and the above tests should be applied in order.

If you don’t meet any of the automatic tests, then you’ll need to consider your sufficient ties to the UK. There are up to 5 sufficient ties to the UK which include:

• The family tie
• The accommodation tie
• The work tie
• The 90 day tie
• The country tie

The sufficient ties test makes a clear distinction between ‘arrivers’ defined as individuals who were not resident for all of the previous three tax years and ‘leavers’ defined as individuals who were resident at anytime in the previous three tax years.

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Information you may need

It may be helpful to have records of when you were in the UK to hand.

Other tax status

There are also other tax status to be considered when determining where you stand with respect to tax rules.

If during a tax year you started to live or work abroad or you came from abroad to live or work in the UK, as a UK resident ‘split year’ treatment may apply to you. To be entitled to ‘split year’ treatment there are conditions which you must meet.

The SRT isn’t straightforward to determine residence in the UK and therefore advisable to seek advice from your accountant to correctly determine your residency status. The test above is of a general nature and is for guidance only. It isn't intended to address the circumstances of any particular individual, as such it shouldn’t be used solely for your decision making process. Your residence status can only be determined through facts and circumstances. The results are also based on you providing accurate information.

The content of this post is up to date and relevant as at 03/04/2017.

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