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Am I a UK Tax Resident? What it means and how to find out

We often get calls from prospective clients asking Am i a UK tax resident? Alice Thornton looks at the question and investigates how you find out.

By admin
04 Jul 2023
Accounts & Compliance

Now that the majority of the world’s countries have opened their borders back up and are again welcoming travellers, it might be time to consider where you are tax-resident or more proactively, where you might like to be tax resident.

What does it mean to be UK tax resident?

A UK tax resident will be liable to UK tax on their worldwide income and gains. This means that UK tax rates will apply to all income earned by the taxpayer regardless of where it was generated.

Can I decide where I’m tax resident?

As with most things, HMRC’s approach to tax residency is a bit of a journey, so buckle in…

The first step is to look at the first automatic UK test (so far so logical) whereby you will be considered automatically UK resident if you have:

  1. Spent at least 183 days in the UK during the tax year in question.

If you meet the above stop here, you have no choice but to hand over a portion of your hard earned cash to HMRC.  However, if this doesn’t sound like you, you will need to carry on, there’s still a chance you can pay your tax somewhere else, hopefully somewhere with less rain if you can swing it.

You are considered automatically non-UK resident if you meet any of the following tests:

  1. You spend less than 16 days in the UK;
  2. You spend less than 46 days in the UK and haven’t been UK tax resident in any of the preceding three tax years;
  3. You spend less than 91 day in the UK and work full time overseas.

Meeting the above conditions means you’ll be non-UK resident and overseas income does not fall to be taxed in the UK.  Be mindful that, subject to the relevant double-taxation agreement, UK source income may still need to be declared here (but that’s a whole other article).

Then we jump back to the remaining automatic UK tests:

  • Your only home in the UK (for 91 days or more in a row) – and you visited or stayed in it for at least 30 days of the tax year;
  • Full-time employment in the UK.

Still not you? Fear not, this is where things get really exciting…

If you have not satisfied either of the above automatic residency tests, then we will need to have a think about the number of days you have spent in the UK compared to the number of ‘ties’ you have with our fair nation. The relevant number of ties will depend on whether you have been previously resident or not – for this purpose you are considered to have been previously resident if you were deemed to be UK tax resident in any of the preceding three tax years.

What is a tie?

  1. Family – do you have a close family member in the UK? i.e. a spouse/civil partner or minor child
  2. Accommodation – do you have a house in the UK which you have made use of during the tax year?
  3. Work – did you carry out substantive work in the UK?
  4. Days in the UK – did you spend more than 90 days in the UK in either of the previous two tax years?
  5. Country – did you spend more time in the UK than in any other country during the tax year?

For individuals who’ve been non-UK resident throughout the preceding three tax years, the Country tie is not considered.

The Sufficient Ties tests

Days in the UKPreviously residentNot previously resident
Less than 16Automatically not residentAutomatically not resident
16 to 45Resident if at least 4 UK tiesAutomatically not resident
46 to 90Resident if at least 3 UK tiesResident if 4 UK ties
91 to 120Resident if at least 2 UK tiesResident if at least 3 UK ties
121 to 182Resident if at least 1 UK tiesResident if at least 2 UK ties
183 or moreAutomatically residentAutomatically resident

So, what does all of this mean for me?

Well, firstly if you are someone who flits around the globe, it would be sensible to keep ta record of the days you spend in different countries as you go through the tax year (bearing in mind tax authorities have access to Border Force data) – this enables you to get an idea of your likely tax residency in real time and stops a lot of hard work later on.

Once you have an idea of how many days you will spend in the UK, you can consider planning your trips to suit your desired residency outcome.

Have you worked out if you are a UK tax resident?

If you are wondering if you are a UK tax resident or have exciting future travel plans, please contact us to discuss a residency review or other advice as appropriate. Our details are here

For more information on offshore employee benefit trusts keep an eye on our social pages Facebook Instagram and LinkedIn

Other articles relevant to whether you are a uk tax resident

Domicile status

Residency and Your Liability to Tax

Am i a UK tax resident? Was written by Alice Thornton – get to know her better here

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