Am I UK Resident for Tax Purposes?

This question became a little easier to answer recently as the final version of the rules governing what the criteria are for being UK resident for tax purposes were published. Prior to this, despite having convention to go by there was no statutory resident test. It was whatever HMRC said it was, which was unfair.

There are 3 basic tests to determine whether you are UK resident for tax purposes and these are relatively unchanged from the conventions tax practitioners have been using for may years. They are: in UK for more than 183 days or more in the year; you own a home in the UK in which you spend more than 90 consecutive days in the tax year or you work ‘sufficient hours’ in the UK.

If the above does not demonstrate UK residency for tax purpose then a further set of tests exist called ‘sufficient ties’ tests. These include: where your family lives; whether you have accommodation in UK for your own use; whether you spend more than 90 days in the UK during the last 2 tax years and other tests. These ‘ties’ and others are used to determine whether you are resident or not and the more ‘ties’ you have the fewer number of days you need to be in the UK to become resident. For example if you were resident in one of the last 3 tax years and you have at least 4 ties then you would only need to be in UK between 15 and 45 days to become resident (a lot less than previously.)

With many families having left the UAE for the long school holidays, it may be that those who have recently arrived in the UAE from UK may be caught by some of these rules if they spend a lot of the summer holidays in UK especially if they then go back for Christmas as well.

I hope the above is useful, having done two weeks of legislative updates I will try and find something lighter next week.

2 Comments

  • Having spent years living and working overseas, how do I find out if I am eligible for a state pension if/when I choose to return to the uk to retire? If the answer is yes, how much is it?

    • Hi Don, thank you for your comment and for reading the blog. To get a forecast of your UK State Pension entitlement you need to visit the following website: http://www.gov.uk and search for ‘BR19’ which is the form you will need to complete and send to HMRC in UK. It usually takes about 2-3 months to get a reply and you will then know what your UK State Retirement date is as well as the amount you can expect to receive. It is possible to top-up your Basic State Pension by making voluntary National Insurance Contributions (NICs) and if you have not contributed for several years you can also back-date some contributions. Generally this is a cost effective method of providing for retirement if you are intending to retire to UK. However the maximum benefit is just GBP113 per week at present and so you should make additional provision over and above the Basic State Pension. I hope the above is useful, let me know if you need help with the form or you have additional questions.