All You Need To Know About The Statutory Residence Test
Contributed by: Berley

The government introduced the Statutory Residence Test, also known as SRT, back in April 2013 and the test is designed to decide on your residence status, which helps to determine whether you should pay tax here in the UK or not.

There are many grey areas in these rules and although we cover the main points here, this cannot substitute professional guidance about your personal circumstances and tax status here in the UK.

Your tax status here in the UK largely depends on how long you stay in the country and your connections here. These factors will be added together with other calculations and will determine the outcome of your SRT.

In the past, there was a less clear and structured way of determining Statutory Residence as most cases were decided using existing case law from past rulings, however the SRT was developed to ensure a more open and transparent approach to determining residence for tax purposes.

What Does The SRT Consist Of?

The SRT has three parts; the automatic overseas test, the automatic residence test and the sufficient ties test.

The automatic overseas test considers if there are grounds for automatic non-residence in a specific tax year and if you meet one of four automatic overseas tests applied to your circumstances, you will be declared non UK resident. These include:

  • working full time abroad and spending less than 91 days in the UK during the tax year in question
  • being non-resident in the UK for any of the last three tax years and spending less than 46 days in the UK during the tax year in question
  • being resident in the UK for one or more of the last three tax years but spending less than 16 days in the UK during the tax year in question
  • dying during a tax year and being non-resident in the UK for the previous tax year and the one before.

If you do not meet any of the automatic overseas test, you will be classed as resident in the UK for tax purposes if you met the automatic residence test or the sufficient ties test.

The automatic residence test looks at whether you should be automatically resident in the UK in a specific tax year, and the sufficient ties test considers your residency based on the time you spent here and your ties in the UK. This will apply if:

  • you spend at least 183 days in the UK in that tax year
  • you have a home in the UK for a period of 91 days consecutively, 30 of which are in this particular tax year in which you spent at least 30 days in and you do not have a home overseas or do not spend at least 30 days in that year in it
  • where you work enough hours in UK in that year period, whether that period runs for all or part of the tax year, and there are no significant breaks
  • if you die and were resident in each of the three years previously or the other residence tests apply

The sufficient ties test will be applied by testing the relationship to the UK along with the number of days spent here. The ties are as follows:

  • you have a spouse or child or partner resident in the UK
  • you have accommodation here in the UK and you spend one night there
  • you worked in the UK for 40 days or more
  • you spent more than 90 days in the UK in either or both of the last two tax years
  • you spend more time here in the UK than anywhere else

When there are split years, someone dies or you are temporarily non-resident, this can have implications. In any case, the rules are complex so taking advice is crucial to your status.

Call us now on 020 7636 9094 or email info@berley.co.uk and we’ll be happy to help you.