The Statutory Residence Test
Readers who are concerned that the new Statutory Residence Test (SRT) may have changed their status for UK tax purposes would be advised to consider how the new rules apply. If you are concerned, please contact us.
The rules that determine if you are resident in the UK for tax purposes, known as the Statutory Resident Test (SRT), changed from 6 April 2013 (subject to Finance Bill 2013 receiving Royal Assent). Historically, residence in the UK was determined by being in the UK in excess of 182 days in any tax year (6th April to 5th April) or by being resident in the UK for an average of 91 days in any tax year, taking the average of the tax year in question and the three previous tax years.
The new SRT consists of the three separate tests which are intended to provide greater certainty as to a taxpayer's residency status. For the majority of taxpayers it will be clear whether or not they are resident in the UK. However, if you have complex circumstances the SRT will provide more clarity as to your residency status in the UK.
The three tests which comprise the SRT are as follows:
An automatic non-residence test.
An automatic residence test.
A 'sufficient ties' test.
In addition, HMRC have recently launched a pilot version of an on-line residence indicator. The Tax Residence Indicator will provide an indication of a taxpayer's residence status by for example analysing how many days are spent in the UK, looking at family ties etc.