Statutory Residency Rules
- February 3, 2025
- Posted by: Best4business Team
- Categories: News, Tax

In the UK individuals who are considered residents for tax purposes are taxed on their worldwide income and gains. Non-residents, however, are only taxed on their UK-sourced income and are exempt from UK capital gains tax. Therefore it is crucial to determine a taxpayer’s residency status accurately.
Since the 2013/14 tax year, the Statutory Residence Test (SRT) has been used to determine an individual’s residency status for both income tax and capital gains tax purposes. The SRT consists of three steps, which must be followed in order:
- Automatic Overseas Test: if any of the conditions noted further below are met, the individual is considered non-resident for the tax year. If none of the conditions noted further below apply, the next step should be considered.
- Automatic UK Test: If any of the conditions noted further below are met, the individual is considered a UK resident for the tax year. If none of the conditions noted further below apply, the next step should be considered.
- Sufficient Ties Test: If neither of the above tests applies, residency status is determined by the number of ties an individual has to the UK and the number of days they spend in the country.
Now, let’s explore each test in detail.
Automatic Overseas Test
An individual is considered non-resident under the Automatic Overseas Test if:
- They were resident in the UK in one or more of the previous three tax years and were present in the UK for fewer than 16 days during the current tax year, or
- They were not resident in the UK in any of the previous three tax years and were present in the UK for fewer than 46 days in the current tax year, or
- They worked abroad for an average of 35 hours per week throughout the tax year and were present in the UK for fewer than 91 days, with no more than 31 days spent working in the UK. (A workday is defined as any day on which the individual works for more than three hours.)
Automatic UK Test
An individual is considered a UK resident under the Automatic UK Test if:
- They were present in the UK for 183 days or more during the tax year, or
- They have a UK home that was available to them for at least 91 consecutive days during the tax year, with at least 30 days spent in the home. Additionally, either the individual has no overseas home, or they have an overseas home but spent fewer than 30 days there in the tax year, or
- They worked full-time in the UK for a continuous period of 365 days, with at least one working day falling within both the 365-day period and the current tax year. There should be no significant breaks from work, and 75% of the working days must have been in the UK. (A working day is defined as any day on which the individual works for more than three hours.)
Sufficient Ties Test
If an individual does not meet the criteria for the Automatic Overseas Test or the Automatic UK Test, their residency status is determined by the Sufficient Ties Test. This test considers both the number of days spent in the UK and the individual’s connections to the country. Possible UK ties include:
- Family Tie: Having a close family member in the UK.
- Accommodation Tie: Having a place to live in the UK.
- Work Tie: Working in the UK for at least 40 days during the tax year.
- 90-Day Tie: Having spent more than 90 days in the UK in either or both of the previous two tax years.
- Country Tie: Having spent more days in the UK during the tax year than in any other single country.
These ties, combined with the number of days spent in the UK, are used to determine residency status.
Below are the criteria based on the number of days spent in the UK:
For Individuals Who Were UK Residents in One or More of the Previous Three Tax Years:
- If the individual spent between 16-45 days in the UK, they need at least 4 UK ties.
- If the individual spent between 46-90 days in the UK, they need at least 3 UK ties.
- If the individual spent between 91-120 days in the UK, they need at least 2 UK ties.
- If the individual spent more than 120 days in the UK, they need at least 1 UK tie.
For Individuals Who Have Not Been UK Residents in Any of the Previous Three Tax Years:
- If the individual spent between 46-90 days in the UK, they need all 4 UK ties.
- If the individual spent between 91-120 days in the UK, they need at least 3 UK ties.
- If the individual spent more than 120 days in the UK, they need at least 2 UK ties.
Speak to an Expert
This article provides a basic overview of the residency tests, but the legislation surrounding the Statutory Residence Test (SRT) is detailed and complex. It should not be solely relied upon to determine residency status, and seeking professional advice is strongly recommended. Our team has years of experience handling residency status matters and would be happy to assist you. Please feel free to contact us with any questions.