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Amended proposals for UK statutory residence test published


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Summary: Amended proposals for the new statutory residence test have now been published, together with draft legislation. The structure of the proposed test is largely unchanged.

From 6 April 2013, whether someone is resident in the UK or not will be determined, either by certain ‘conclusive tests’ or a combination of the number of days a person is in the UK, and the number of defined ‘UK ties’ that person has to the UK.

The fewer days an individual spends in the UK, the more UK ties will be required before that person is treated as UK resident, and vice versa.

The main changes from the earlier proposals are:

  • a person who was resident in the UK in any of the preceding three tax years can spend up to 15 days in the UK in the tax year and remain conclusively non-UK resident (increased from 10 days);
  • greater clarity on some of the terms used - in particular, what constitutes a ‘home’ (which is relevant to whether a person is conclusively resident) and ‘accommodation’ (which is one of the UK ties). In neither case is it necessary for the property to be owned by the individual.

    A holiday home, weekend home or temporary retreat (a term which requires further clarification) should not count as a ‘home’ for the conclusive residence test - although this is not yet reflected in the draft legislation. Holiday homes, weekend homes, temporary retreats, relatives’ houses and even hotel rooms may however count as ‘accommodation’ and so be a 'UK tie' for the non-conclusive tests;

  • the current concessionary split year rule will be placed on a statutory footing but will only apply in specific circumstances - eg. where a person leaves the UK to work full-time abroad or returns to the UK after a period of working full-time abroad;
  • days that a person spends in the UK due to exceptional circumstances outside his control - eg. as a result of sudden illness, war or a natural disaster - will be disregarded for all day counting purposes, up to a maximum of 60 days in any one tax year;
  • transitional rule - where a person needs to know his residence status in the preceding three tax years to work out whether he is an ‘arriver’ or a ‘leaver’ under the new rules, he can elect for the new statutory rules to apply for determining that question;
  • the separate concept of ordinary residence is being abolished from 6 April 2013. Currently, a person who is UK resident but not ordinarily resident in the UK is not subject to some of the income tax anti-avoidance provisions that apply to offshore trusts. In future, these provisions will apply to anyone who is UK resident. However, where a person currently benefits from being not ordinarily resident, transitional rules will ensure that he can continue to enjoy the same advantages, for up to two years, if he would have done so if the concept had not been abolished. ‘Overseas workday relief’, that currently applies to the earnings from foreign employment duties of a person who is not ordinarily resident, will be placed on a statutory footing but will in future only be available to non-UK domiciled individuals.

Proposed statutory residence test

Taking into account the latest consultation the proposed new statutory residence rules are as set out below.

Note that a person is treated as being in the UK on any day where he is in the UK at midnight, for both the conclusive tests and the non-conclusive tests (subject to exceptions where the person is ‘in transit’).

Conclusive tests

The following ‘conclusive’ tests will apply:

  • a person who was resident in the UK in one or more of the preceding three tax years and spends less than 16 days in the UK in the tax year will be non-UK resident;
  • a person who was not UK resident in any of the preceding three tax years and spends less than 46 days in the UK in the tax year will be non-UK resident;
  • a person who leaves the UK to work full-time abroad and spends less than 91 days in the UK in the tax year and spends no more than 20 of those days working in the UK will be non-UK resident;
  • where a person does not fall into one of the above three categories, the following tests apply:


    • a person whose only home (or homes) is in the UK will be UK resident;

    • a person who works full-time in the UK will be UK resident;

    • a person who spends 183 days or more in the UK in the tax year will be UK resident.

Non-conclusive tests

In all other cases a person’s residence will be determined by looking at the number of days he is in the UK combined with the number of defined ‘UK ties’ he has to the UK, as set out below.

Arrivers & leavers

The proposals distinguish between:

  • arrivers - people coming to the UK for the first time, or after having been non-UK resident for at least the last three tax years; and
  • leavers - people leaving the UK after having been UK resident in any one of the previous three tax years.

‘Arrivers’ who spend less than 91 days in the UK can have significant connections with the UK before being treated as UK resident. ‘Leavers’ who spend less than 91 days in the UK must have fewer ‘UK ties’ if they wish to be non-UK resident. The tables below set out the proposals in more detail.

UK ties

  • Family - the person’s immediate family (wife/civil partner and/or children) are resident in the UK.


    A person’s child will not be treated as in the UK if they are only here to attend school and they spend less than 21 days in the UK outside term time.

    Where a person’s minor child is resident in the UK, the child’s residence will only be a ‘UK tie’ for that person if he sees the child in the UK for more than 60 days during the tax year.

  • Accommodation - the accommodation does not have to be owned by the individual but merely available to them for at least 91 days during the tax year, and the person must spend at least one night in the accommodation during the tax year.
  • Substantive work in the UK which doesn’t amount to full-time work (full-time work in the UK being a conclusive test) - the person works in the UK on 40 or more days in the tax year.

    A person works in the UK for a day if he does more than three hours work in the UK on that day. The Government is consulting on whether this limit should be in increased to 5 hours.

  • UK presence in previous years - the person spent more than 90 days in the UK in either of the two previous tax years.
  • More time in the UK than in other countries - the person spends more days in the UK in the tax year than in any other single country. This factor is relevant for ‘leavers’ only.


Anti-avoidance rules will apply from 6 April 2013 to prevent individuals becoming non-UK resident for a short time in order to avoid or mitigate UK tax on certain investment income.

Individuals who have been UK resident for a number of years and become non-UK resident for less than five full tax years will continue to be subject to UK tax on certain investment income which arises during their period of non-UK residence. This is an extension of the rule that already exists in relation to capital gains tax.

This rule will apply, amongst other things, to dividends paid by closely controlled companies. It will not apply to employment income, bank interest or dividends from listed companies.

Welcome certainty

There is no doubt that the proposed test is a significant improvement on the existing position, particularly as it means that in future most individuals will be able to determine their residence status with a far greater degree of certainty. However, inevitably the residence status of certain individuals will be altered and those who may be affected should seek advice.

There remain some practical issue - for example around the definition of ‘home’ and evidencing the number of hours worked in the UK in a day - but it is likely that these will be dealt with by Revenue guidance rather than further amendments to the draft legislation.

We anticipate that the new test will be applied from 6 April 2013 rather than there being any further delay.

Proposed non-conclusive residency tests


Days in UK                         Residence status

Fewer than 46                     Always non-resident

46 - 90 days                       Resident if 4 UK ties

91 - 120 days                     Resident if 3 or more UK ties

121 - 182 days                   Resident if 2 or more UK ties

183 days or more                Always resident


Days in UK                        Residence status

Fewer than 16                     Always non-resident

16 - 45 days                       Resident if 4 or more UK ties

46 - 90 days                       Resident if 3 or more UK ties

91 - 120 days                     Resident if 2 or more UK ties

121 - 182 days                   Resident if 1 or more UK ties

183 days or more                Always resident


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