Statutory Residence Test Print

The Statutory Residence Test (“SRT”) came into force with effect from 6 April 2013 and sets out the requirements for an individual to be automatically resident overseas, or automatically resident in the UK. For individuals who fall somewhere between these parameters the SRT sets out a series of sufficient ties tests. These tests are based on lifestyle, and have been coupled with a day count to establish whether or not the individual is resident in the UK. The tests are slightly different for individuals arriving in, or leaving the UK.

Under the SRT an individual is resident for the whole tax year if he meets the residence conditions for any part of the year. The individual may be able to claim Split-Year treatment to exclude his overseas income and gains from liability to UK tax for the part of the year he lives overseas. This is discussed further in the section on Split-Year Treatment.

An individual should take the following steps to determine whether he is resident in the UK for a particular tax year:

  1. Establish whether he has spent 183 days in the UK during the tax year under review. If so, he will be resident in the UK. If not:
  2. Consider the second and third automatic UK tests. If one of these is met, the individual is UK resident, if none of these tests is met:
  3. Consider whether any of the 3 automatic overseas tests apply. If one of these tests is met, then the individual is not resident in the UK for that year. If none of those tests are met:
  4. Consider the sufficient ties test. If this test is met, the individual is UK resident. If the test is not met, then the individual is not UK resident.

Under the transitional provisions, for the purposes of determining an individual’s residence for the tax years 2013/14, 2014/15, or 2015/16, 2016/17 or 2017/18 the individual may elect to determine his residence for a year prior to 2013/14 by reference to the Statutory Residence Test. It should be noted that this will not affect his tax status as determined under the pre-April 2013 rules for those earlier years.

The election, which is irrevocable, must be made:

In writing, either on the self-assessment tax return, or by letter sent to HMRC;

No later than the first anniversary of the end of the year to which it applies, or if the year is a split year, by the first anniversary of the end of that year.

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