Becoming or Staying Non-UK Tax Resident: fewer than 90 days may not be enough…
I still hear individuals say that as they will spend fewer than 90 days in the UK during a tax year, they will not be tax resident.
The old ordinarily resident rules left us in 2013 and were replaced with the Statutory Residence Test (SRT), but the memory of the old 90-day lingers on.
Unfortunately, anyone relying on spending 90 days or fewer in the UK in a tax year to ensure they remain non-resident, may be in for an unpleasant surprise. It is essential that they review their position under the (not-so-new) Statutory Residence Test (SRT).
The Statutory Residence Test (SRT) & Tax
The easiest rule to remember is that if you spend 183 days or more in the UK, you will be UK resident.
If you spend fewer than 183 days, matters are more complex, and you will need to run through the SRT
The SRT is a series of stages. If your residence position is determined at one stage, you can stop. If your residence hasn’t been determined at a particular stage, you move to the next.
The test considers whether you are “automatically non-resident” and “automatically resident”, looking at your days of presence, full-time work and whether you have a home. If you are neither automatically non-resident nor automatically resident, you must consider the number of “ties” that you have to the UK including family, accommodation, work, the “90-day” tie and, if you have been resident in one of the three previous tax years, a country tie.
The more ties, the fewer the number of days of presence you will need before being treated as UK resident.
More information can be found here on Tax Residency
Fewer than 90 Days = Not Resident?
Simply put, the rule of spending fewer than 90 days in the UK and being not resident is untrue.
I have seen cases where individuals have spent as low as 16 days in the UK and still met the UK residence requirements. At the opposite end of the spectrum, is also possible for individuals to spend 182 days in the UK and meet the requirements of being not resident in the UK.
If you have any doubts about your residence position get advice, ideally before your residence position changes. It is easy to plan your UK residence position and this will allow you to understand the impact of the amount of days or ties you have with the UK will have on your residence position.
Tailoring the test to your requirements before the end of the tax will give you more options. For example, if you wanted to spend more time in the UK and didn’t meet any of the automatic cases, you may be able to cut a tie with the UK which would then allow more days of presence in the UK.
As always, record keeping is key to ensuring that you can substantiate your residence position should HMRC ever enquire.
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