The Statutory Residence Test
The rules that determine if someone is resident in the UK for tax purposes are known as the Statutory Resident Test (SRT). 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 SRT came into effect in April 2013 and consists of three separate tests that 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, for taxpayers with complex circumstances the SRT will provide more clarity as to their 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.
HMRC have recently published a guidance notice RDR1. The new guidance includes details of the new SRT rules and replaces the HMRC6 booklet.