Am I a UK tax resident? How to determine your UK residence position

Importance of knowing your UK residence status

It’s important to know if you are a UK resident as your residence status determines your UK tax liability and entitlement to Income Tax allowances and exemptions. 

As a UK tax resident, you must pay tax on the income you receive from UK sources. If you are UK domiciled, you will also have to pay UK tax on your worldwide income. If you are a resident but not domiciled in the UK, you can use the remittance basis where you will only pay tax on any non–UK income if you bring the money into the UK and don’t have to pay UK tax on overseas income – if you leave it offshore. 

How to know if you’re a UK tax resident and need to pay tax in the UK (residence tests)

Some circumstances will make you an ‘automatic’ resident in the UK. However, if you are not an automatic resident – the number of days you spend in the UK in addition to other factors will determine your residence position. Read on to understand how to determine your UK residence status – using the four major residence tests in the UK. 

1. Statutory Residence Test (SRT) 

SRT allows you to work out your residence status for a tax year by taking the following into account: 

• Amount of time you spend and, where relevant, work in the UK. 
• Connections you have with the UK. 

Usually, physically being in the UK for 183 days or more automatically makes you a UK resident, and there is no need to consider any other tests. 

You can test if you are a resident in the UK for the whole tax year using the: 

• Automatic overseas tests 
• Automatic UK tests 
• Sufficient ties test 

2. Automatic overseas tests 

There are three tests to consider in this test. You will be considered a non-UK resident for the tax year if: 

1. You were resident in the UK for one or more of the three tax years before the current tax year, and you spent fewer than 16 days in the UK in the tax year. 
2. You were a resident in the UK for none of the three tax years before the current tax year and spent fewer than 46 days in the UK in the tax year. 
3. You work full-time overseas over the tax year and: 

• You spend fewer than 91 days in the UK in the tax year. 
• The number of days you work for more than 3 hours in the UK is less than 31. 
• There is no significant break from your overseas work. A significant break is when at least 31 days go by, and not one of those days is a day where you work more than three hours overseas, and you would have worked for more than 3 hours overseas, but you did not because you were on annual leave, sick leave, or parental leave. 

3. Automatic UK tests 

There are three tests to consider in this test. You are a UK resident for the tax year if: 

• You spend 183 days or more in the UK in the tax year. 
• You have or have had, a home in the UK for all or part of the year, and all the following apply:

1. There is or was, at least 91 consecutive days when you had a home in the UK. 
2. At least 30 of these 91 days fall in the tax year when you have a home in the UK, and you have been present in that home for at least 30 days at any time during the year. 
3. At that time, you had no overseas home, or if you had an overseas home, you were present in it for fewer than 30 days in the tax year. 

• All the following apply: 

1. You work full-time in the UK for any period of 365 days, which falls in the tax year. 
2. More than 75% of the total number of days in the 365 days when you do more than 3 hours work are days when you do more than 3 hours work in the UK. 
3. At least one day must be both in the 365 days, and the tax year is a day on which you do more than 3 hours of work in the UK. You can also read more on this test here. 

4. Sufficient ties test 

Carry out the sufficient ties test if you do not meet either the automatic overseas tests or the automatic UK tests. 

The test will help you work out if your ties (connections to the UK), taken together with the number of days you spend in the UK, will make you resident in the UK for that tax year. 

If you were not a UK resident in any of the three tax years before the one you are considering, you will need to check if you have any of the following: 

• Family tie 
• Accommodation tie 
• Work tie 
• 90-day tie 

This table shows UK ties needed if you were a UK resident for one or more of the three tax years before the tax year under consideration 

If you were resident in the UK in one or more of the three tax years before the one you are considering, you also must check whether you have a country tie. 

This table illustrates UK ties needed if you were a UK resident in none of the three tax years before the tax year under consideration. 

Each of the ties has its own set of conditions or qualifying criteria attached to them. The more UK ties you have, the fewer days you can spend in the UK before becoming a UK resident.  

What to do if you have paid tax on your foreign income already 

If you have already paid tax on your foreign income, you will need to report your overseas income on your Self-Assessment tax return. You can also claim Foreign Tax Credit relief on your self-assessment tax return. 

Need help with finding a UK Tax Residence position? 

At Spondoo Accountants, we understand that Tax residence is a complicated area, that is why we will be happy to help you with your personal circumstance. Contact us for guidance!