UK expats may not understand new statutory residence test

Published:  24 Jan at 6 PM
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The UK’s new Statutory Residence Test, (SRT), due to come into effect on 6 April this year, needs to be fully understood by expats who split their time between their new country and the UK.

The overhauled SRT has significant implications for expats planning to leave the UK as well as those already living overseas but with ties and connections with the country. Residency will now be determined by the Automatic Overseas Residence test and the Sufficient Ties test.

Expats are automatically classed as overseas residents if they have not lived in the UK for the last three years and spend less than 46 days in the UK every year. Similarly, those who have lived abroad for a period of one year or more within the last three years and spend fewer than 16 days in the UK during the current tax year are classed as overseas-resident.

Full time overseas workers who spend less than 91 days in the UK per tax year and work in the UK for less than 31 days at a rate of less than three hours a day will also be classed as overseas-resident. From the above, it is obvious that it’s a complex area easily misunderstood by many expats.

Automatic residency is determined by 183 days in the UK per year and having a home or working full-time in the UK. This means that a person without automatic overseas residency who visits for more than 16 days in one year will be taxed as a permanent resident.

Should said person have UK family ties, a property, work, stays with a family member or spends more time in the UK than in any other country, he or she will be classified as a permanent resident. Experts state that the new tax residency changes are the widest and most confusing of any over the last century.
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