UK Statutory Residence Test

UK tax residence can bring both advantages and disadvantages depending on your circumstances and objectives. For most individuals, determining where you are tax resident is straight-forward – where you live most of the time usually resolves the issue. But for those who have a less settled lifestyle the position is more complex.

Establishing your tax residence

Establishing whether you are UK tax resident will involve consideration of the UK Statutory Residence Test. It is also possible that a Double Tax Treaty may displace UK tax residence in favour of residence in another country.

Under the Statutory Residence Test there are rules for both Automatic Overseas Tax Residence and Automatic UK Tax Residence. If neither of these determines the position, there is the Sufficient Ties Test which takes into consideration the number of connections you have to the UK in conjunction with the number of days spent here.

For those with more complex financial affairs, or those seeking to remain non UK resident for tax purposes, it is essential to understand the intricacies and ambiguities of the Statutory Residence Test and how these relate to your personal circumstances.

The proposals to replace the current basis of taxation for non-doms with a system linked to their residence status will increase the importance of the UK Statutory Residence Test to internationally mobile individuals coming to the UK.

As Ritchie Phillips specialise in private client taxation you can rely on us to get to the heart of your tax residence status, allowing you to make strategic decisions in relation to your financial affairs. Please get in touch if you would like to discuss any of these issues.