UK tax residency question

gravlax

If you are in the UK for 183 days or more in the tax year you are 'Resident for tax' in the UK. But if you are in the UK for less than 183 days, there are supplementary 'tests' to determine if you are UK tax resident. The first 3 (there are others too) are:

1. Were you resident in the UK for 1 or more of the 3 previous tax years and you spent fewer than 16 days in the UK in the current tax year

2. You were not resident in the UK for the 3 previous tax years and spent less than 46 days in the UK in the current tax year

3. You worked full time overseas and spent less than 91 days in the UK in the current tax year

For the above when it asks if you were "resident" or "not resident" does it mean 'resident for tax' for 'visiting/present' in the UK?

If you have lived, worked, and been tax resident overseas for 15 years, then retire. You keep your current home overseas, you spend 5 months (less than 183 days) a year in the UK every year, and the rest outside the UK, would you become UK resident for tax or does that maintain your non-UK resident status?

c-m

Regardless of residence you'd pay UK tax on income earned in the UK. And tax in the second country on money earned in that country. 

As for tax residence it might then very well depend on where your centre of economic interest lies. If there is more economic activity in one state more so than the other it could be deemed that state is where you are resident. Similarly where is the family home or usual abode, and what ties do you have to that state. 

Failing these it and where agencies argue, it can just come down to nationality. 

It's weird as it's something that is super simple on the face of it, but can be extremely complicated and nuanced when you dive deeper. 

P.S you might get a better answer if you state the other country, as a lot it is set out in the tax treaties between countries. 

NorthYorkie

The answer to the second question is 'maybe'. You have mentioned some of the tests (which you don't seem to meet) but there are then other 'tie tests' to consider - see RDRM11500 - Residence, Domicile and Remittance Basis Manual - HMRC internal manual - GOV.UK (www.gov.uk). If the sums potentially at stake are significant, it will be worth paying for professional advice. 

gravlax

Even the HMRC site words one of the tests as "If the individual was not UK resident in any of the 3 years prior to the year in question, they will need to consider the following ties:"

The term 'resident' is used all the time in the test, but without stating what it means in the context of the tests. Does "UK resident" mean was not 'UK resident for tax' or just was not 'present in the UK'?

NorthYorkie

It means not resident for tax purposes in any of the three preceding years

sheramber

check section 7.5

HMRC6 Residence, domicile and the remittance basis - GOV.UK

https://assets.publishing.service.gov.uk › uploads › file

PDF

Jeremy535897

Where your overseas home is will be relevant too, as there may be a double tax agreement with the UK that overrides domestic law.