Top Tip – New Statutory Residence Test – CII R03, R06, AF1, AF5
Last updated on September 25th, 2019 at 4:45 am
For those that have been in the industry a while, you will be familiar with the term ‘ordinary residence’. Prior to this year, we could be treated as UK resident in a tax year but not necessarily ordinarily resident. The rules were hard to interpret to say the least and so I was pleased to see that for all intents and purposes the term ‘ordinarily resident’ has pretty much disappeared from the text books.
Since April 2013 we have had a Statutory Residence Test which consists of:
- automatic tests for non-residence;
- automatic tests for residence; and
- a sufficient ties test, for those who are not automatically non-resident or resident.
HMRC have produced some guidelines which I am summarising here: (you look at each test in turn – so if you do not qualify as automatically not resident under the test, then the next step is to consider whether you would be automatically resident)
Automatically NOT resident if:
- In the UK for less than 16 days
- Not resident in the previous 3 years and in the UK for less than 46 days in current year.
- Left for full time work abroad (at least 35 hours pw) and in the UK for less than 91 days in the tax year and less than 31 days in the tax year are spent working in the UK. This includes self-employed work.
Automatically resident in the UK
- In the UK for 183 days in the tax year or
- Your only home is in the UK (and you live in it for at least 30 days)
- If you work full time in the UK continuously for 12 months
Sufficient UK ties test – depending on the number of ‘ties’ you also need to consider the number of days spent in the UK during the tax year. (We’ll look at number of days next week). There are five UK ties:
- Having a spouse, civil partner or minor children resident in the UK
- Accommodation in the UK
- Doing substantive work in the UK (40 or more days a tax year)
- Spending more than 90 days in the UK during either of the 2 previous years
- Spending more time in the UK than in any other single country (this only applies when you leave the UK)
All in all it should make things a lot easier when trying to determine residency for our clients.
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