PT 46 - Residence - The statutory Residence Rules

Question 1

What are the three parts of the statutory residence test

Answer 1

1. the automatic overseas tests
2. the automatic UK tests
3. the sufficient ties test

Question 2

Under the automatic overseas tests, an individual is non resident in the UK if:

Answer 2

1. They were resident in the UK in one or more of the previous three tax years AND are present in the UK fewer than 16 days, or
2. They were not resident in the UK in all of the previous three tax years and are present in the UK for fewer than 46 days, or
3. they work abroad for an average of 35 hours per week and are present in the UK for fewer than 91 days, or which fewer than 31 days are spent working in the UK

Question 3

What are the automatic UK tests

Answer 3

1. they were present in the UK for 183 days or more
2. they have a UK home; or
3. they work full time in the UK

Question 4

How is the UK home test (in the automatic UK test) met

Answer 4

1. there is a period of at lleast 91 consecurive days of which at least 30 fall within the tax year when
2. the individual has a UK home in which they spend at least 30 days in the tax year and either
3. they have no home overseas or
4. they have a home overseas but they use that home on fewer than 30 days in the tax year

A home is a place which the individual uses with a degree of permenance or stability

Question 5

Full Time Work

Answer 5

An individual will be classed as working full time in the Uk if
1. they work an average of 35 hours or more per week in the UK over a continuous period of 365 days
2. during that 365 day period there are no significant breaks from work
3. more than 75% of the working days are carried on in the UK and
4. at least one working day in the UK falls in both the 365 day period and the tax year

A working day is any day on which more than 3 hours work is carried out

Question 6

Sufficient ties test

Answer 6

1. Family - partner or minor children in the UK
2. Accommodation - place to live in the UK made use of during the year available for at least 91 consecutive days
3. Work - 40 or more UK workdays in the tax year
4. UK presence - more than 90 days in the UK in either of previous two tax years
5. Country - more days in the UK in the tax year than any other single country (only relevant for individuals who have been UK resident for at least one of three tax years)

Question 7

Residence Implication

Answer 7

Non Resident - taxable only on UK income
Resident - taxable on worldwide income and gains

Question 8

Where in the legislation is the table for sufficient ties

Answer 8

FA 2013 sch 45
(paragraphs 18 - 19 for the two tables regarding how many ties you need)

Apparently can also be found in RDR3

Question 9

An individual is treated as being in the UK for the day if….

Answer 9

they are in the UK at midnight.

There are exceptions for transit days and where the individual would be outside the UK but for exceptional circumstances beyond their control.