Residence status – clarifying rules for tax purposes

If you were born abroad, have lived abroad for more than 6 months, or work abroad for more than a total of 183 days per year, then there are some tax rules that might apply to you. The tax system in the UK is based on an individual’s residence and domicile status. In this blog, we look at how to work out your residence status. Click here to read our blog on determining your domicile status.

If you’d like to chat to an adviser at Wow to ensure you’re paying the correct amount of tax, please get in touch – we’re here to help. Here’s some more information:

Since 2013, residence has been determined by the Statutory Residence Test.

You will be a classed as a UK Resident if any one of these apply to you

• Spend more than 183 days in the UK
• Live in the UK and don’t have a home anywhere else
• Have an overseas home but spend less than 30 days there

You will be a Non Resident in the UK if you

• Work full time abroad and spend less than 91 days in the UK – of the 91 days no more than 30 can be workdays

It gets more complicated if you spend between 31 and 182 days in the UK in a tax year

• Then you will need to look at the significant ties you have with the UK, such as family, accommodation, work, UK presence and a country tie

What is a UK day?

• A UK day for the purposes of residence is a day where you are in the UK at midnight

• Records should be kept of the number of days you have spent in and outside the UK. These can be in the form of boarding passes, travel tickets or even a cash withdrawal receipt from a cashpoint in an airport
• You can disallow up to 60 days in a tax year due to exceptional circumstances. These apply where the individual has no choice but to stay in the UK

How are you taxed

• If you are resident and domiciled in the UK you are taxed on worldwide income in the UK
• If you are resident in the UK but not domiciled here then you are taxed on UK source income in the UK and, broadly speaking, on foreign income if you bring it to the UK
• If you are non resident in the UK then you are taxed on UK source income only

How Wow can help

If you would like any more information on residence and domicile status and how it may affect your tax position, please contact Sarah Eble at Wow – sarah.eble@thewowcompany.com or 01264 721670.