The UK statutory residence test (“SRT”) is a welcome step forward to determine an individual’s tax residence status. The statutory residence test follows years of uncertainty where the criteria for assessing UK residence were often difficult to determine. To help you decide where you are resident for tax purposes we have set out below a brief overview. Tax residence is a relevant factor for determining a variety of taxes including tax on income, royalty payments, dividend payments, capital gains and death taxes. Every case is different. Our team includes solicitors and accountants with specialist tax expertise which enables us to advise on all aspects of a transaction including legal and commercial issues as well as taxation. We are happy to help you at any time. http://www.gannons.co.uk/expertise/tax-law/
The UK statutory rules provide a comprehensive – but complex – matrix of tests to determine residence for tax purposes. The legislation applies from 5 April 2013 and where an individual has previously been treated as non-resident in the UK or resident under the old rules in the UK there is a possibility that their residence status may have changed.
HMRC summary on the application of the statutory residence test is found in guide RDR3http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=YdWGuSSGR24&formId=7405
The UK statutory residence test comprises a number of stages. The first test is to consider whether an individual passes the “automatic UK tests” or “automatic overseas test” – if so they are clearly established as resident or non-resident and none of the additional tests need to be considered.
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