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UK Legislation

New UK rules on determining residency

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New UK rules on determining residency

Postby gozomark » Sat 13 Apr 2013 09:56 GMT

UK HMRC has published new rules on helping people determine if they are UK resident or not. They reduce a lot of the grey areas. It also includes guidance on split year treatment.

www.hmrc.gov.uk/budget-updates/11dec12/ ... t-note.pdf

Its to apply from the tax year just about to start - its a 55 page document, but at its heart its fairly simple.

Statutory residence test

You will be resident in the UK for a tax year if:
you meet the automatic residence test, or the sufficient ties test. If you meet neither of these tests you are not resident for UK tax purposes for that tax year.

You will meet the automatic residence test in a tax year if: you meet any of the automatic UK tests, and you do not meet any of the automatic overseas tests.

automatic UK tests

First automatic residence test. You spend 183 days or more in the UK in the tax year.
Second automatic residence test. The second automatic residence test is relevant if you have a home in the UK.
Third automatic residence test You work full-time in the UK for 365 days or more with no significant break from UK work.

Automatic overseas tests

You are automatically non-resident for a tax year if you meet any one of the following tests.
First automatic overseas test You were resident in the UK for one or more of the three tax years preceding the tax year, and you spend fewer than 16 days in the UK in the tax year.
Second automatic overseas test. You were resident in the UK for none of the three tax years preceding the tax year, and you spend fewer than 46 days in the UK in the tax year.
Third automatic overseas test. You work full-time overseas for the tax year without any significant breaks from that overseas work, and:
you spend fewer than 91 days, excluding deemed days, in the UK in the tax year, and
the number of days in the tax year on which you work for more than three hours in the UK is fewer than 31.

Sufficient ties test
If you don’t meet any of the automatic overseas tests or any of the automatic UK tests, you should use the sufficient ties test to help you decide your UK residence status for a tax year. This test examines your ties to the UK in the following areas:
1. family
2. accommodation
3. work
4. number of days spent in the UK in the previous 2 tax years
5. whether you spend more time in the UK than elsewhere

and applies rules to determine whether those ties are sufficient for you to be considered UK resident for tax purposes.

A supporter of Gozo SPCA (a charity the Malta forum donates 50% of its income to) has kindly produced a flow chart to help work out ones status - its available for free to any paidup members of the forum - just send me a message with your email address
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