Statutory residence test (SRT) meaning

A Taxpayer v Revenue and Customs Commissioners [2025] EWCA Civ 106 What are the practical implications of this case? This case matters to those advising individuals on UK tax residence and the statutory residence test, and to any taxpayer intending to rely on para 22(4). After the Court of Appeal ruling, practitioners can inform taxpayers that some degree of choice, when deciding whether to come to or depart the UK, does not of itself bar the day-count exemption within the statutory residence test; an issue thrown into doubt by the Upper Tribunal in July 2023... Advisers may now explain that being prevented from leaving the UK is not confined to physical or legal restraint. The exemption can apply where circumstances are objectively compelling, including the moral obligations operating on the taxpayer at the time. Accordingly, a taxpayer’s response to, for example, the illness of a close relative—and the moral obligations they bear in that situation—may suffice for the exemption to apply. The case restores the scope for ‘moral...

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...

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...

Residence The UK’s first formal tax residence test for individuals, the statutory residence test (SRT), came into force on 6 April 2013. Before that date, whether someone was tax resident in the UK was decided through a mixture of case law, practice and HMRC guidance, which produced significant uncertainty—see Practice Note: Residence before 6 April 2013 [Archived]. This Practice Note: explains the principal features of the SRT, and summarises: the basic rule the automatic overseas tests the automatic UK tests the sufficient ties test This Practice Note, and the additional Practice Notes on the SRT, provide only a summary and are not comprehensive. Inevitably, some interpretations are open to debate or particular circumstances may not have been within the consideration of the draftsmen, so the primary legislation should always be consulted. HMRC has issued detailed guidance entitled ‘Guidance note: Statutory Residence Test (SRT)—RDR3’. HMRC’s view on...

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...