Statutory Residence Test (SRT) Health Warning

We have added a warning note to our Statutory Residence Test (SRT) guides. The new warning will apply to cases where a taxpayer may be resident for tax purposes in more than one country and there is a double tax treaty. 

  • Since the introduction of the SRT many taxpayers and their advisers take the results of the SRT to be all that is needed to establish residence status.
  • If you are also spending time or working in another country you may also be resident for tax in that country,
  • In some situations the SRT will not provide the correct result in terms of your residence for tax purposes and in those cases the matter will generally be determined by relevant double tax treaty with the UK.
  • Tax treaties set the rules as how income and assets are taxed according to place of residence.
  • A further complication is that many other countries have different residency tests of their own.
  • In general terms, if another country is able to provide a certificate of residence this will decide the matter as to whether you are resident there. It is not always possible to obtain such a certificate.
  • Tax treaties often contain different provisions and these may be planning opportunities particularly for non-UK domiciled individuals.

Our new warning:

WARNING NOTE: the SRT is not always conclusive in determining your residence for tax purposes.

  • It is possible that you may also be tax resident in another country under the terms of its own tax rules.
  • If so, you need to also consider the other country's residence tests: these may different to the UK's tests.
  • If you are also resident in another country you will need to review the appropriate double tax treaty with the UK and if necessary apply the treaty's own tie breakers.

 

Links to more guides on residence

SRT: Statutory Residence test 
Our subscriber guide to the SRT

SRT Toolkit
Our interactive toolkit to determine residence status

SRT: Split Year Treatment
Our guide to Split Year treatment

SRT Day Counting Toolkit
Our guide to day counting and links to our day counting calendar