UK: UK’s Statutory Residence Test Becomes Law

Last Updated: 8 August 2013
Article by Bart Peerless


The UK's new statutory residence test ("SRT") finally passed into law on 17 July 2013 when the Finance Act 2013 received Royal Assent. The SRT takes effect from 6 April 2013.

From its first appearance as a Government proposal in June 2011 the draft SRT has been through a series of revisions, clarifications and refinements. The result is an SRT that is more complicated than had been anticipated. It will moreover take time for some of the remaining "wrinkles" in the new SRT to be ironed out. Nevertheless it is an improvement on the old uncertain tests of residence, based heavily as they were on the contingencies of case-law.

In this briefing we set out the main features of the new SRT as finally enacted. However, this briefing provides only a broad outline and it will be important to take professional advice.


The proposed test falls into three parts as set out below.

"Automatic overseas tests": an individual will be conclusively non-UK resident in a particular tax year1 if

  • he/she was resident in the UK in one or more of the previous three tax years, was present in the UK for fewer than sixteen days in the tax year in question and does not die in the tax year;
  • he/she has been non-UK resident for each of the previous three tax years and is present in the UK for fewer than 46 days in the tax year in question;
  • he/she works "sufficient hours" (broadly equating to full-time) abroad with no significant break from overseas work, is present in the UK for fewer than 91 days in the tax year (excluding so-called "qualifying days")2 and there are fewer than 31 days on which he/she does more than three hours' work in the UK. Special rules apply to international transportation workers;
  • he/she dies in the tax year in question, spent less than 46 days in the UK in that tax year and (i) was non-UK resident in the two preceding tax years or (ii) was non-UK resident in the immediately preceding tax year and in the year before that the tax year was a split year on the basis that he/she was a "leaver" from the UK.
  • (i) he/she dies in the tax year in question (ii) on the basis of working "sufficient hours" overseas he/she was non-resident for each of the two preceding tax years or for the immediately preceding tax year with the year before that being a split year on the basis that he/she had started full-time work overseas and (iii) in the tax year in question (the year of death) he/she would have been automatically non-UK resident due to working abroad (and assuming that the requirements are pro-rated from the start of that tax year to the day before the date of death.)

If a person does not satisfy any of the automatic overseas tests (so as to be conclusively non-UK resident), then go to the automatic residence tests.

Automatic residence tests: an individual will be conclusively UK resident in a particular tax year if

  • he/she is present in the UK for 183 days or more in the tax year
  • he/she has a home in the UK. In more detail the requirements are that (i) the individual has a home in the UK during all or part of the tax year where he/she "spends a sufficient amount" of time in the year (ii) there is at least one period of 91 consecutive days (of which at least 30 days fall within the tax year in question) during which the individual has the UK home and throughout which the individual has no home overseas or if he/she has an overseas home he/she spends no more than "a permitted amount of time" there in the tax year in question. The individual "spends a sufficient amount of time" in the tax year in question in the UK home if he/she is present there for at least 30 days in the tax year (for no matter how short a time). The individual spends no more than" the permitted amount of time" in the overseas home in the tax year if he/she is there for fewer than 30 days in the year.

Stan has lived in Australia all his life. In June 2012 he takes a holiday in London and likes it so much he decides to emigrate to the UK. He spends the next few months preparing for the move. He sells his Australian house (his only home) on 10 January 2014 and arrives in the UK on 25 January 2014. He finds a flat in London and moves in on 1 February 2014. The London flat is now his only home and he lives there for a year.

During tax year 2013-14 Stan is present in his Australian home on 250 days, and he is present in his London flat on 55 days.

In 2013-14 Stan has a home in the UK from 1 February 2014 and is present in it on at least 30 days. Also from 1 February 2014 there is a period of 91 consecutive days at least 30 days of which fell in 2013-14 (the tax year under consideration) when Stan has a UK home and no overseas home.

As Stan does not meet any of the automatic overseas tests, he is resident in 2013/14 under the "home in the UK" automatic residence test.
  • (i) over a 365 day period falling wholly or partly in the tax year in question the individual works "sufficient hours" (which equates broadly to full-time work) in the UK with no significant breaks (ii) more than 75% of the total number of days in the 365 day period on which the individual does more than three hours' work are days on which he/she does more than three hours' work in the UK and (iii) at least one day which falls both in that 365 day period and in the tax year in question is a day on which the taxpayer does more than three hours' work in the UK. Special rules apply to international transportation workers.
  • (i) the individual dies in the tax year in question (ii) was UK resident under the automatic UK residence test in the three preceding tax years and (even assuming that he/she were not UK resident in the tax year in question) the immediately preceding tax year was not a split year in relation to him/her (iii) when the individual dies his/her home (or at least one home if he/she has several) was in the UK and (iv) if the individual had a home overseas during all or part of the year in question he/she did not spent "a sufficient amount of time there" in that year. For this purpose the individual would have spent a sufficient amount of time in the overseas home if present there for at least 30 days or on each day of that year up to the date of death.

If an individual does not satisfy any of the automatic overseas tests (so as to be conclusively non-UK resident) or any of the automatic UK residence tests (so as to be conclusively UK resident) then go to the sufficient ties test.

"Sufficient ties" test: under this head an individual's UK residence status depends on (a) how many of the specified "UK ties" apply to him/her and (b) how many days he/she spends in the UK in the tax year in question. The greater the number of UK ties that apply to the individual the fewer the number of days he/she is permitted to be present in the UK without becoming UK resident. Which UK ties are relevant depend on whether or not the individual was UK resident for any of the three tax years before the tax year in question. It is an aim of the rules to make it more difficult to become non-UK resident if and individual has been UK resident in any of the previous three tax years, than if such individual has not been so resident.

If a person is an "arriver" (having been non-UK resident in each of the three tax years preceding the tax year in question) the UK ties that have to be taken into account are

  • having a UK resident family member (ie a child under 18, spouse, civil partner or person with whom the individual is living as spouse or civil partner)
  • having a place to live in the UK
  • working in the UK for at least 40 days, each day involving more than three hours' work
  • spending 90 days or more in the UK in either of the two previous tax years.

Some of the terms used above are explained in the "Background" section of this briefing - see below.

For "arrivers" the UK ties relate to the number of days spent in the UK as set out in the table below

Days spent in the UK Impact of UK ties on residence status
Fewer than 46 days Non-resident
46-90 days Resident if individual has 4 UK ties (non-resident with 3 or fewer UK ties)
91-120 days Resident if individual has 3 or more UK ties (non-resident with 2 or fewer UK ties)
121-182 days Resident if individual has 2 or more UK ties (non-resident with 1 or no UK ties)
183 days or more Resident

If a person is a "leaver" (having been resident in one or more of the previous three tax years) the relevant UK ties are those set out above for "arrivers" with the additional tie of spending more time in the UK than in any other single country.

For "leavers" the UK ties are combined with days spent in the UK to determine residence status as follows

Days spent in the UK Impact of UK ties on UK residence status
Fewer than 16 days Non-resident
16-45 days Resident if individual has 4 or more UK ties (non-resident with 3 or fewer UK ties)
46-90 days Resident if individual has 3 or more UK ties (non-resident with 2 or fewer UK ties)
91-120 days Resident if individual has 2 or more UK ties (non-resident with 1 or no UK ties)
121-182 days Resident if individual has 1 or more UK ties (non-resident if no UK ties)
183 days or more Resident

If a person does not satisfy the automatic residence test or the sufficient ties test, he/she is non-UK resident even if he/she does not satisfy the automatic non-UK residence test.

Transitional provisions In some cases it will be necessary to determine an individual's tax status in one or more tax years for which the SRT was not yet in force. This will be relevant for example (a) in determining whether an individual is an "arriver" or a "leaver" under the "sufficient ties" test (b) in some cases in applying the automatic residence or non-residence tests (c) in some instances in order to determine whether split year treatment is due and (d) in some cases to determine whether certain anti-avoidance provisions apply. In the absence of transitional provisions UK residence for all tax years prior to 2013/14 would have to be assessed under the pre-6 April 2013 rules on UK residence as set out in HMRC's booklet HMRC6 – under which it might not be possible to say with certainty whether or not an individual was UK resident. This might mean that in cases of doubt, individuals wishing to remain non-UK resident would in practice have to consider themselves as "leavers" (thus more severely restricting their time in the UK) until they have been able to establish non-UK residence under the SRT.

In order to deal with the difficulty described in the above paragraph, the SRT includes a transitional rule to apply in cases where an individual's tax status, or tax liability under the split year provisions, in any of the tax years from (and including) 2013/14 to (and including) 2017/18 is partly dependent on their tax status in an earlier tax year (a "pre-commencement year") before enactment of the SRT. In such cases an individual may elect to apply the new residence test for those earlier tax years. For some individuals this will create greater certainty in planning visits to the UK over the initial years following introduction of the new test. In the absence of an election the pre-6 April 2013 residence rules (in HMRC6) will apply to pre-commencement years.


Some definitions relating to the SRT

Days spent in the UK

Under the proposed SRT, it is necessary to determine the number of days spent by the individual in the UK. Subject to the possibility of "qualifying days" and "exceptional circumstances" (see the following two paragraphs) a person is treated as being in the UK on any day when they are in the UK at midnight at the end of the day. There is an exception for persons transiting through the UK who are present here at the end of the day but do not undertake activities such as a business meeting substantially unrelated to their transit.

Qualifying days: There is a special provision to prevent people from manipulating the rule on "days spent" in the UK by making frequent visits but managing their time so as to avoid being actually present in the UK at midnight. The legislation thus provides that if an individual (a) has at least three "ties" to the UK (for example, family, accommodation, work and so on) (b) is present in the UK for at least 30 days ("qualifying days") in a tax year but without being present in the UK at midnight on those days and (c) was resident in the UK for at least one of the three preceding tax years, then in relation to the tax year in question each qualifying day in excess of 30 qualifying days spent in the UK is to count as a day spent in the UK for purposes of the SRT. Note though that this deeming rule does not count towards the 90 days' "sufficient ties" test.

Exceptional circumstances: Up to 60 days' presence in the UK may be disregarded if an individual spends days in the UK for reasons beyond their control such as national or local emergencies (war, civil unrest or natural disasters) or sudden or life-threatening illness or injury and provided that that the taxpayer intends to leave the UK a soon as those circumstances permit. This "disregard" will apply for all day counting elements of the proposed new residence test.


One of the UK ties exists if the individual in question has one or more UK resident family members i.e. if the individual's spouse, civil partner or common law equivalent are resident in the UK or any part of it (but ignore a spouse, civil partner or common law equivalent if the individual in question is separated under a court order or separation agreement or where the separation is likely to be permanent) or if the individual's children under 18 are resident in the UK and the individual spends time or lives with them in the UK for all or part of 60 days or more during the tax year. A child who is UK resident but who would be non-UK resident if the time spent in full-time education in the UK were ignored, will be treated as non-resident if he/she spends no more than 20 days in the UK outside term time (with half-term breaks being treated as within term-time for this purpose.)


A further UK tie exists if the individual has "a place to live" in the UK which is available to be used by them for a continuous period of at least 91 days in a tax year (including gaps of fewer than 16 days between periods in the tax year in which a particular place is available to the individual) and the individual spends at least one night in that place during the tax year. The individual is considered to have a "place to live" in the UK if they have one or more homes or a holiday home or similar or other available accommodation in the UK. There is no requirement that the individual owns the property. The test is modified if the accommodation is the home of a close relative.


Split years

Under the SRT a tax year will be split into periods of residence and non-residence in certain tightly defined situations (and bearing in mind that complex conditions must be satisfied in each case) falling under the following broad headings :

  • the individual leaves the UK to live overseas and ceases to have a UK home
  • the individual in question loses UK residence by working full time abroad or is the partner of such an individual
  • the individual starts full-time work in the UK
  • the individual ceases full-time work overseas or is the partner of someone ceasing such full-time work; or
  • the individual starts to have a home in the UK for the rest of the tax year and continues to do so in the following tax year and is also UK resident in the following tax year

Temporary non-UK residence

Anti-avoidance provisions are potentially applicable to individuals who become temporarily non-UK resident (ie for under five full tax years). If falling within such provisions, affected individuals are liable to UK tax on their return to the UK in relation to gains or certain categories of income arising or (in the case of non-domiciliaries) remitted during their absence.

Ordinary Residence (OR)

The concept of OR was abolished on 6 April 2013.

OR was a different concept from residence and focused more on a person's habitual residence.

OR was relevant to a person's tax liability in certain ways, including:

  • A person who was not ordinarily UK resident could claim the remittance basis of taxation for foreign investment income;
  • If non-ordinarily resident, a person was entitled to the remittance basis on income from foreign employment duties where the income was paid by a UK employer and hence was a UK source. This was known as overseas workday relief ("OWR") and used to be particularly important for short-term secondees to the UK. Despite the abolition of the concept of OR, OWR is to be retained but in a slightly different form (see further below).
  • Only ordinarily UK resident individuals fell within the so-called "transfer of asset abroad" provisions. These are anti-avoidance provisions designed to limit individuals' options for avoiding tax through the use of offshore vehicles.

Following abolition of the concept of OR individuals who would have been eligible to elect for the remittance basis on overseas investment income will no longer be able to do so. Moreover, the transfer of assets abroad provisions will apply more widely, to all individuals resident in the UK (not limited, as previously to ordinarily resident individuals).

Transitional provisions are available to some individuals who were resident in 2012/13 but as at 5 April 2013 were not ordinarily resident.


From 6 April 2013 OWR is available only for non-domiciled individuals claiming the remittance basis who arrive in the UK having been non-UK resident for three consecutive tax years within the previous five tax years.


The SRT is contained in over 60 pages of the Finance Act 2013. This briefing can thus provide only a broad brush overview. One of the objectives of the new test was to make it simpler for individuals arriving in and departing from the UK to plan their tax affairs. The Government has moreover provided an on-line indicator residence tool to help individuals to determine their UK residence status which might be useful in some cases. In practice, however, it seems likely that many individuals will still need to seek professional advice on their UK tax status and on the steps they need to take in the context of their broader tax affairs.


1 A tax year runs from 6 April in one year to 5 April in the following year.

2 On the meaning of "qualifying day" see below under the heading "Days spent the UK".

3 This example is taken from page 17 of HMRC Guidance note: SRT (SRT) published in May 2013.

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