Statutory residence test meaning

Flowchart This flowchart sets out the way in which UK non-residence or residence is established—firstly by applying the automatic overseas test, and secondly by considering the automatic UK test. Please also see the Statutory residence test and residence flowchart (sufficient ties), as well as the Statutory residence test ‘home’ flowchart...

This Flowchart This flowchart shows how UK residence is assessed under the ‘sufficient ties’ test. Please also consult the Statutory residence test and residence flowchart (automatic tests), as well as the Statutory residence test—‘home’ flowchart...

County Court judgment creditor—what are my enforcement options?...

Court of Appeal confirms deportation exclusion affecting trafficking victims (SSHD v VLT & S) Secretary of State for the Home Department v S (Advice on Individual Rights in Europe (AIRE) Centre intervening); Secretary of State for the Home Department v VLT (Advice on Individual Rights in Europe (AIRE) Centre intervening) [2025] EWCA Civ 188 What are the practical implications of this case? Representatives acting for clients with CG concluded before 31 January 2023, and with an outstanding re‑trafficking protection claim, may inform them they qualify for KTT‑derived discretionary leave (‘the concession’). They may seek temporary leave owing to that unresolved protection claim. The applicable test, drawn from KTT, is whether leave is required by their ‘personal circumstances’. However, those subject to a deportation order are excluded from the concession. Instead, they must meet the same statutory threshold as everyone else: namely, that their continued presence is necessary to assist recovery. The judgment produces a two‑tier position among VOTs with CG before 31 January 2023 (para 111). Individuals in...

The court rejected the Upper Tribunal (UT) and affirmed a First-tier Tribunal (FTT) ruling which concluded that the woman, identified in the judgment as P, was not a UK resident even though she spent more than 45 days here in the relevant tax year, the benchmark applied for the UK statutory residence test. It accepted the FTT’s assessment that six of the fifty days she was in the UK arose from ‘exceptional circumstances’, and therefore should be disregarded. Excluding those six days from the calculation, the court held HMRC accordingly could not levy tax on £8m of dividend income. The woman relocated from the UK to Ireland in April 2015, shortly ahead of the 2015–16 tax year commencing, while her husband continued to reside in their family home near Manchester...

The court rejected the Upper Tribunal (UT)’s stance and affirmed a First-tier Tribunal (FTT) ruling that concluded the woman, identified in the judgment as P, was not UK-resident, even though she spent more than 45 days here in the relevant tax year, the benchmark for the test at issue in the case. It accepted the FTT’s conclusion that 6 of the 50 days she was in the UK arose from ‘exceptional circumstances’. Those six days are excluded from the count, the court held, so HMRC cannot levy tax on the £8m of dividends for that tax year. The woman relocated from the UK to Ireland in April 2015, shortly before the outset of the 2015–16 tax year, while her husband continued still to reside in their family home near Manchester...

This Practice Note deals with the application of the residence rules to people leaving the UK after 5 April 2013. The UK introduced its first codified individual tax residence test—the statutory residence test (SRT)—with effect from 6 April 2013. For detailed guidance on the SRT, refer to the Residence after 5 April 2013 Practice Note. Prior to that date, an individual’s UK tax residence was assessed by reference to a patchwork of narrow statutory provisions, case law, established practice and HMRC guidance. Status for any period before 6 April 2013 must therefore still be established under those earlier rules. Application of the SRT looks in part at whether a person was UK resident in the preceding three tax years, meaning residence outcomes for 2010/11, 2011/12 and/or 2012/13 matter when assessing residence from 6 April 2013. Although the pre‑2013/14 years remain governed by the old law, an individual may choose to have their residence in one or more of those years determined under the SRT, solely for the purpose of...

This Practice Note has been archived and is no longer maintained. Finance Act 2025 (FA 2025) brings in legislation to abolish the remittance basis of taxation and to replace it with a residence-based regime from 6 April 2025. Adjustments have also been made to overseas workday relief, so that an employee’s entitlement depends on their residence for the relevant tax year and, subject to certain transitional provisions, whether they are eligible for the four-year foreign income and gains regime for that year. For details on these updates, see the following Practice Notes: The abolition of the remittance basis of taxation from 2025–26 Foreign income and gains regime from 6 April 2025 Overseas Workday Relief from 6 April 2025 For the OWR rules that applied before 6 April 2025, see Practice Note: The statutory residence test—overseas workday relief before 6 April 2025 [Archived]. Facts Petra is a German national and is domiciled in Germany for UK tax purposes....

The statutory residence test (SRT) The statutory residence test (SRT) is the framework for deciding whether a person is UK tax resident for 2013–14 and later tax years. Crucially, it applies only to income tax, capital gains tax, inheritance tax (IHT) and corporation tax. Other regimes use distinct rules—most notably Stamp Duty Land Tax and National Insurance. The SRT focuses on the consequences of time spent in, and ties to, the UK. It is entirely separate from immigration law and any permission to enter, live or work in the UK. These notes consider the UK as a whole. They do not cover the separate residence rules that determine whether someone is resident in a constituent nation, such as Scotland or Wales, for devolved tax purposes. As explained in Practice Note: The structure of the statutory residence test, establishing an individual’s residency under the SRT can involve up to three stages. The steps are: First, check whether the individual spent 183 days or more...

Key points Residence determines the scope of a person’s liability to UK income tax and capital gains tax (CGT). An individual’s tax residence is established under the Statutory Residence Test (SRT). A person can be tax resident in multiple countries at the same time, as each jurisdiction applies its own domestic rules. Someone who is not resident in the UK is taxed only on UK‑source income and on certain gains from disposing of UK assets, including residential property. Value added tax (VAT), stamp duty land tax (SDLT) and the Annual Tax on Enveloped Dwellings (ATED) may apply to both residents and non‑residents. Before 6 April 2025, domicile—rather than residence—was the principal factor in determining exposure to inheritance tax (IHT). From 6 April 2025, IHT liability is largely linked to the period an individual has been resident in the UK. Residence of individuals—summary An individual’s UK tax residence is relevant when determining liability to income tax and CGT. Those...