The Statutory Residence Test, or SRT, is the single factor that determines how you pay tax in the UK. It decides whether you are resident or non-resident for a given tax year, and your residence status decides which sources of income and gains you pay tax on to HMRC.
If you are resident, you are liable to UK taxation on worldwide income and gains.
If you are non-resident, you are liable to UK taxation on UK sourced income and UK property gains only.
As such, the first step in your UK tax planning is to confirm your resident status.
Key terminology
Before working through the SRT, it helps to define a few core terms.
Day of presence Being on UK soil at midnight, meaning 23:59 going into the following day.
Workday Exercising more than three hours of work on UK soil in a given day.
Home A property that has permanence and stability, such as an owned home, a rental home, or a room in a parent’s house for your exclusive use.
Accommodation A property that is transient in nature, such as a spare room, a long term Airbnb, or a holiday home.
Family Immediate family, meaning a spouse, civil partner, cohabitee, or a child under the age of 18.
How the UK tax residency assessment works
To determine your residence status you work through a series of tests, split into three categories.
Once your personal circumstances and travel pattern satisfy one of the tests, that concludes your residence status for the tax year in question.
You must work through these tests in strict priority order. You cannot jump ahead. If Step 1 determines your status, you stop there. If not, you move to Step 2. Only if neither applies do you reach Step 3.
Image 1 — the three steps, worked in order
Step 1: Automatic Overseas Tests
The first step evaluates whether you qualify as automatically non-resident. If you meet at least one of these conditions you are non-resident for that tax year, with no need to go further.
Physical presence You are present in the UK at midnight on no more than 15 days. This increases to 45 days once you have been non-resident for three complete tax years.
Full time work abroad You are in full time work overseas, achieved by working 35 hours overseas per week, exercising a workday overseas at least every 31 days, exercising no more than 30 workdays in the UK, and spending no more than 90 midnights in the UK.
HMRC guidance on automatic overseas tests.
Step 2: Automatic UK Tests
If none of the automatic overseas tests apply, you move to Step 2. Here the SRT evaluates whether you meet any condition that makes you automatically UK resident.
Physical presence You are present in the UK at midnight on 183 days or more.
UK home You have a UK home that you are present in for at least 30 days. The home must be available for your use for a continuous period of at least 91 days, 30 of which fall within the tax year. During that 91 day period you must either have no home overseas, or be present in any overseas home for no more than 29 days.
Full time work in the UK You are in full time work in the UK, achieved by working 35 hours a week on average, exercising a workday in the UK at least every 31 days, and exercising at least 75% of your work duties in the UK.
HMRC guidance on automatic resident tests.
Step 3: The Sufficient Ties Test
If you are not automatically non-resident under Step 1 and not automatically resident under Step 2, the sufficient ties test determines your status.
Your position then depends on two factors: the number of days you spend in the UK, and the number of UK ties you have.
The five UK ties
The SRT recognises five types of connection to the UK.
Family tie Your spouse, civil partner, cohabitee or children aged under 18 are UK tax resident.
Accommodation tie You have a place to live in the UK available for your use for a continuous period of at least 91 days, and you spend at least one midnight there. That rises to 16 midnights if the property belongs to a close relative.
Work tie You exercise 40 or more workdays in the UK.
90 day tie You spent more than 90 midnights in the UK in either or both of the two tax years immediately preceding the year in question.
Country tie You spend more days in the UK than in any other single country. This tie is removed once you have been non-resident for three complete tax years.
How ties determine your status
The number of ties you have combines with your UK day count to determine residence.
Image 2 — ties against days
One point of order is worth noting. For someone not resident in the prior three years, one tie requires 183 days or more, which is the point at which the automatic UK test applies in any event. The row is included for completeness, but in practice Step 2 will have settled the position before you reach it.
HMRC guidance on sufficient ties test.
Practical steps for managing your SRT position
Track your days carefully. The difference between 89 and 91 UK days can change how the sufficient ties rules apply. Use a spreadsheet, calendar or app to record each UK entry and exit.
Audit your ties annually. Review the five tie framework before each tax year begins. If you want to maintain a particular residence outcome, you need to monitor accommodation, work patterns, family connections and prior UK day counts.
Retain evidence and keep records. You do not usually provide evidence to HMRC proactively in order to state your residence position. However, HMRC can request evidence if your status is reviewed, so it is important to track your days and retain supporting documents such as boarding passes, travel confirmations, rental agreements and work records.
Do not guess. The SRT is rules based but detailed. If you misunderstand your position, you may file an incorrect self assessment return, or miss a claim that depends on your residence status.
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Get your position confirmed in writing
Global Tax Consulting advises internationally mobile individuals on residency reviews, UK tax planning and tax return preparation. Tell us where you are and what you earn, and you will have a fixed fee and a clear view of your UK tax position.
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