What is the Statutory Residence Test?

What is the Statutory Residence Test and who does it apply to?

The Statutory Residence Test is the legislation which the UK taxman (HM Revenue and Customs) uses to determine an individual’s status for UK tax purposes. The test uses a framework of questions and tools which have to be considered by those seeking non-resident status every year.

Essentially, the test divides taxpayers into three separate possible categories, each with their own rules.

  1. Those considered automatically non-resident
  2. Those considered automatically resident
  3. Those who need to review connecting factors with the UK and the amount of time spent here

One of the most complex areas of the new legislation relates to ‘splitting’ a tax year when an individual leaves or returns to the UK.  This means that the relevant tax year will be split into two separate parts. One part applies when the individual is UK resident and the other when non-resident.

Record Keeping

A key consideration of new rules is what records and record keeping are required in proving non-resident status. It is important to remember the onus is always on the taxpayer to prove status.

We work with clients to determine their non-resident status in the light of current legislation. Contact us for further information and assistance.

The information on this website aims to provide a breakdown of the main structure of the new rules to help you at least start to understand your position.  However, this is not intended to form professional advice nor should it be relied upon as such.  The new legislation is complex and before taking any particular action, specific and personal advice should be obtained.

  • Statutory Residence Test Guide

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