UK Resident Status

Statutory Resident Test

If you need help to determine your UK Resident Status or have questions about the Statutory Resident Test, you can call our office for specialist advice about your personal circumstances. Remember if you have failed STR tests does not necessarily mean that you are a UK resident for tax purposes. 

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Statutory Resident Test

UK Resident Status
Foreign Income

UK has a complex tax system, and various taxes apply to individuals. It is vital to know the concepts behind the UK tax and guidance on how these tax laws affect those working or living abroad. Residence status and domicile are two very different concepts in UK tax law, yet they both play a role in determining your overall tax liability. Residence is based on actual time spent in the UK, and domicile is more about an individual’s intention to live in the UK. Read our FAQ for an explanation of the Steps of the Statutory Resident Test (STR). Also, check the glossary for the terms and definitions important to understand for STR.

Please keep in mind that residence and domicile are not the only elements that affect how much UK tax you have to pay. The origin of the income would be the first thing to look at. So, for example, a person who doesn’t live in the UK but has a rental property here would still have to pay UK tax.

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An ordinary resident is deemed to be resident in the United Kingdom and is subject to the country’s income tax laws. First and principally on their UK based income, but perhaps on their international income.

UK residence is decided by the Statutory Residence Test (SRT), which includes a number of tests that will automatically make a person a UK resident or non-resident. Each of the tests must be worked in the sequence stated. Once a test is fulfilled, there is no need to proceed to the next. Each test has its traits, characteristics and subtleties, making them more complicated than they first look. We highly advise you to seek expert guidance if you are unsure about your residence status.

The First Automatic UK Test – When an individual spends more than 183 days in the UK in a tax year, they are a UK resident and need not take the next test.

Three Automatic Overseas Tests — If someone meets these three tests, they are immediately a non-UK resident. Each test’s criteria are:

  • 1st Overseas Test: You must have lived abroad for at least one of the last three years and have spent less than 16 days in the UK.
  • 2nd Overseas Test — Non-resident for the preceding three years and fewer than 46 days in the UK.
  • 3rd Overseas Test: You must be employed full-time in a country outside of the UK and return to the UK for less than 91 days (less than 31 of those are workdays). This test is complex. There’s a separate calculation for “working full-time overseas.” The estimate is based on hours, not days, which might be complicated.

The Second and Third Automatic STR UK tests – if all of the aforementioned tests have been failed, these tests are the ones that come next in line to be examined.

  • 2nd UK Test: This test applies to those who have a residence in the UK and who, throughout 90 days, spend more than 30 days in that country. They must also have no overseas home or spend fewer than 30 days there in 90 days.
  • 3rd UK Test – Full-time work in the UK. Like the third automated overseas test, there is a different formula for determining whether a person works full-time in the UK. This test is made more challenging by its unclear test time.

Sufficient Ties Test – This is the last test of the SRT and is only utilised if none of the other tests applies. It considers an individual’s links to the UK and days spent here throughout the tax year. They’re a resident if they have enough days and ties. Family, housing, and professional relationships are self-explanatory, but two aren’t.

  • 90-day tie examines whether an individual spent 90 days in the UK in either or both of the preceding two tax years.
  • Country tie – only applies if the individual was a UK resident in one of the last three tax years. If they spend the most time in the UK, they have a country tie.

Not answered above?

If you need advice regarding your personal circumstances, please call our office or book an online appointment.

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