Residence is a hugely important concept for the taxation of individuals, as it has a profound effect on whether, and to what extent, they are subject to tax. In this note we introduce the very complex rules which now apply to determine residence for UK tax purposes.


Prior to 6 April 2013, the rules for determining whether an individual was resident in the UK for tax purposes were largely based on cases decided around a hundred years ago. These cases had become difficult to apply in practice, particularly given increases in international mobility. It was therefore difficult in some situations to give a conclusive view on whether a client was, or was likely to become or remain, UK resident.

The UK government introduced a statutory residence test (the SRT) in the Finance Act 2013. The SRT has been effect since 6 April 2013. The SRT is in some respects an improvement on the old rules, since it can be used to determine with much greater certainty when an individual will be regarded as UK resident. In particular, it avoids ambiguities under the old rules about what an individual needs to do, in terms of spending less time in the UK and/or severing links to the UK, to become non-UK resident.

However, aspects of the SRT are hugely, head-spinningly complicated, and the tests can be very difficult to apply in practice. If the intention was to produce a statutory test of residence which would be easy for individuals to use, without legal advice, the SRT must be regarded as a failure.

Structure of the SRT

The SRT determines residence status on a tax year by tax year basis. UK tax years run from 6 April one calendar year to 5 April the next.

Under the SRT, an individual may be:

conclusively non-UK resident in the relevant tax year, if certain conditions are met (see Part 1 of the table below); or
conclusively UK resident in the relevant tax year, if certain other conditions are met (see Part 2 of the table below).
If these parts of the SRT do not determine the individual’s status, the individual is only UK resident if the sufficient ties test is met (see Part 3 of the table below). The outcome under this test depends on:

whether the individual has been UK resident in any of the three preceding tax years
the number of days spent by the individual in the UK in the relevant tax year
the number of ties (specified connecting factors) the individual has to the UK.
How days are counted and what qualifies as a tie are outlined below.

The complexity of the SRT means that it is impossible to cover all of the detail in the legislation in this note. However, the rules can be summarised as follows. It must be stressed that the following is a simplified account of the SRT, and omits details which may (in a liminal case) have a huge impact on the outcome.

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