Since 6 April 2013, the Statutory Residence Test (‘SRT’) has been used to determine whether a person is resident and therefore taxable in the UK on their worldwide income and gains. From 6 April 2025, the SRT is also the tool to determine whether a person’s worldwide assets are subject to UK Inheritance Tax (‘IHT’) at 40% if they fit the definition of a ‘long-term resident’ with 10 years of accumulated UK residence out of the last 20 years. This replaces the concept of domicile (and deemed domicile) as a connecting factor for IHT purposes and results in a further reduction in the number or years of UK residence before a person becomes subject to IHT on their worldwide estate.
Once a person becomes a long-term resident, it can take anything from 3 to 10 years to be outside the scope of one of the highest death tax rates in the world, so it pays for internationally-mobile clients to be aware of how the SRT works.
What are the rules in the Statutory Residence Test
The rules are very detailed and include anti-avoidance provisions but broadly, the SRT looks at how many midnights you are physically present in the UK and how many prescribed UK ‘ties’ you have. There are allowances for certain exceptional circumstances up to 60 days and a limited number of days in transit which are not counted as UK midnights.
A greater number of relevant ties means fewer midnights can be spent before becoming UK resident for a UK tax year. In addition, it matters whether you have been resident in any of the 3 preceding tax years which makes you a ‘Leaver’ as opposed to an ‘Arriver’ who has not been resident in any of the previous 3 tax years. It is also possible to have a resident and non-resident status for different parts of the tax year, referred to as ‘split year treatment’.
The three sub-tests in the SRT
The SRT itself is divided into 3 sub-tests: Automatic Overseas, Automatic UK and Sufficient Ties.
Automatic Overseas
This takes precedence over the other sub-tests, so that a person is automatically resident overseas for a UK tax year if they are, broadly:
- A Leaver with less than 16 UK midnights;
- An Arriver with less than 46 UK midnights;
- Working full-time overseas with less than 31 UK work days and no significant breaks; or
- A person who dies in a tax year with less than 46 UK midnights or was working full-time overseas and was non-UK resident for the previous 2 tax years
Automatic UK
Next, if residence cannot be determined under the Automatic Overseas sub-test, a person will be automatically UK resident for a UK tax year if they, broadly:
- Have at least 183 UK midnights;
- Have their only or main home in the UK;
- Work full time in the UK over a 365 day period;
- Are a person who dies with their main home in the UK when automatically UK resident for the previous 3 tax years
Sufficient Ties
If it is not possible to determine residence under either Automatic Test, then the Sufficient Ties test is used to compare the number of relevant ties against the number of midnights.
The prescribed UK ties are, broadly:
- Family: UK resident spouses, civil partners, co-habitees and minor children
- Accommodation: This is broader than the definition of home and covers a place live in the UK for at least 91 midnights
- Work: 40 days of working more than 3 hours in the UK
- 90 Day: 91 or more midnights in either or both of the previous tax years
- Country: This applies only to Leavers who have the greatest number of midnights in a tax year in the UK as opposed to any other country
Arrivers need to keep to the following UK midnight count to remain non-UK resident:
| No. of UK ties | Maximum no. of UK midnights to remain non-UK resident |
| 4 | 45 |
| 3 | 90 |
| 2 | 120 |
| 1 | 182 |
For Leavers, the limits to remain non-UK resident are:
| No. of UK ties | Maximum no. of UK midnights to remain non-UK resident |
| 4 or more | 15 |
| 3 | 45 |
| 2 | 90 |
| 1 | 120 |
What happens next?
This is a complex area and therefore detailed and accurate record-keeping of your time spent in the UK in each tax year is vital. Our Private Wealth lawyers can provide bespoke advice on your circumstances to ensure your family does not encounter any unwelcome surprises from HM Revenue and Customs in your estate planning.
