A guide to the rules that determine your tax residency status in the UK
A growing number of expats are relocating without properly notifying HMRC.
That’s what the data suggests anyway, after a recent 43% decline in the submission of P85 forms (used to inform HMRC of departure from the UK).
Getting it wrong could mean paying tax twice or facing penalties.
Don’t be one of those people!
Read on to find out how you can stay on the right side of the UK tax residency rules.
WHAT IS TAX RESIDENCE?
Forget the saying “home is where the heart is” (or where your Amazon parcels get delivered), as that doesn’t work for UK tax purposes. HMRC decides on your tax residency based on the number of days you spend in the country and how many ties you have.
If HMRC decides you’re a UK tax resident, then you’re expected to pay taxes on everything, including income, capital gains, rental profits, and dividends – even if it’s earned overseas.
However, if they decide you’re non-resident, HMRC only cares about your UK-based income, such as money from a UK job or property here.
Your residence status affects the forms you’ve got to submit each year. SA109 is the main form for non-residents, but you can’t file that through the normal online system. You’ve either got to do it on paper (with an earlier deadline), or use a third-party tax tool. Alternatively, you can find a good tax adviser to help out.
Beyond tax, your residency status can affect banking and investments. Some UK banks are reluctant to open or maintain accounts for non-residents. If you hold ISAs and pensions in the UK, you won’t be able to put in new money as a non-resident, so you’ll have to rethink your investment plans if you move abroad.
Never be tempted to pull the wool over HMRC’s eyes. If you claim to be non-resident but HMRC decides otherwise, you’re not just looking at back taxes, they’ll also hit you with interest and potentially stiff fines too.
HMRC has the power to open up old records and ask questions going back several years, so if you’re moving abroad, aim to do it all correctly from the beginning to protect yourself from a financial and legal headache later on.
THE UK STATUTORY RESIDENCE TEST EXPLAINED
The Statutory Residence Test, or SRT, is HMRC’s formal way of deciding whether you’re a UK tax resident in any given year. It’s a structured, rule-based system that’s applied annually, so your status can change year to year depending on your circumstances.
The test has three parts, and HMRC works through them in order.
- Automatic Overseas Tests: If you were a UK resident recently and spent under 16 days in the UK, or you haven’t been a UK resident in the last 3 years and spent fewer than 46 days in the country, you’re considered non-resident. Same goes if you’re working full-time abroad, i.e. fewer than 91 days in the UK.
- Automatic UK Tests – If you’re spending 183 days or more in the UK, or have a UK home and spend at least 30 days there, or work full-time in the UK, then you’re considered resident.
- Sufficient Ties Test – If neither of the first two tests give a clear answer, HMRC looks at your ties to the UK, such as family, accommodation, work, past presence, and even where you spend most nights. Then depending on whether you’re a leaver or an arriver, you need a certain number of those ties based on how many days you’ve been in the UK that year.
| Days in UK | Leaver (ties needed) | Arriver (ties needed) |
| 16–45 | 4 | – |
| 46–90 | 3 | 4 |
| 91–120 | 2 | 3 |
| Over 120 | 1 | 2 |
As you can see, the SRT isn’t exactly a quick mental calculation. You’ll have to keep close track of time spent in both countries and how many ties you have in the UK.
NAUNCES THAT CAN AFFECT YOUR DAY COUNT
Although the UK residency test seems straightforward enough, there are these hidden traps that can quietly tip you over the edge if you’re not paying close attention.
The Deeming Rule
If you’ve been resident in the past three years, have three UK ties, and have already spent 30+ “partial” days in the UK, HMRC can deem extra days to count, even those quick ins-and-outs where you thought you were safe. It can cause your day count to creep up and pass the threshold for residency.
Transit Days
Days spent travelling through the UK usually don’t count, as long as you’re just passing through and not doing anything that could be classed as “other business.” The moment you pop out for a meeting or quick family visit, then HMRC can count it. Just grabbing a bite to eat in the terminal? You’re probably okay, but be careful not to push it too far in case HMRC decide to investigate.
Exceptional Circumstances
Visiting the UK for things like illness, bereavement, or emergencies can give you up to 60 “free” days per year that don’t count, as long as you can prove it. That means keeping real documentation, not just a note in a diary.
Log Everything
To stay on top of it all, it’s a good idea to create a colour-coded spreadsheet to log all your days in the UK, work activity, transit, and possible exclusions. Keep proof such as official documents, transport tickets, and receipts. Doing so will save you a lot of stress when it’s time to file your taxes.
SPLIT-YEAR TREATMENT: WHEN YOU ARRIVE OR LEAVE MID-YEAR
Normally, HMRC looks at tax residence for the entire tax year. This means if you only lived in the UK for a few months, they could try to tax you on your entire year’s worldwide income. Split-year treatment, if you qualify, means the tax year gets split into two parts:
- A UK-resident part in which you’re taxed on everything, worldwide income included.
- And a non-resident part, where HMRC only taxes you on your UK-based earnings.
This is a lifesaver if you’re moving to or from the UK mid-year for a new job or returning after time abroad. Some other scenarios where you might qualify are as follows.
- Starting full-time work abroad
- Coming to the UK to take up a jo
- Losing or gaining a UK home mid-year
- Moving abroad with a partner who goes first
DUAL RESIDENCY AND DOUBLE TAX TREATIES
When you’re an expat, it can feel like you’re caught in a tug-of-war between two tax offices. When you live internationally, it’s easy to end up in a situation where both countries claim you as a tax resident and both want their slice.
This is known as “dual tax residence” and it happens when you meet the tax residency criteria in more than one country at the same time. Maybe you’re splitting your time between Spain and the UK. Each country has its own rules, with the UK using the SRT, but Spain might look at where you spend the most time or where your personal ties are strongest. It’s possible to be considered as a tax resident in both, even in the same year.
Thankfully, many countries (especially those popular with expats) have a double tax treaty in place. The tie-breaker rule usually applies here, to help determine which country gets the final say on your tax residency for treaty purposes. They’ll typically look at the following criteria.
- Where your permanent home is
- Where your economic and personal life is centred
- Where you habitually live
- Your nationality
To benefit from these rules, you’ll have to formally claim treaty relief as it doesn’t usually kick in by default. If you’re dual resident and want the UK to back off because another country takes priority, you’ll need to fill in form HS302.
If you’re not a UK resident, but have UK income that should be exempt under a treaty, then it’s form HS304.
RESIDENCY VS. DOMICILE
When you hear the terms “residency” and “domicile”, you might assume they’re interchangeable. But in reality, they’re completely different concepts that impact your tax position in different ways.
Residency is decided on a year-by-year status that’s defined by the number of days you spend in the UK and ties to the country.
Domicile, on the other hand, is more about your roots and long-term intentions. You’re typically born with a domicile (often from your father’s side, legally speaking), and changing it isn’t easy. Domicile is important when it comes to Inheritance Tax (IHT), and until recently was also key to the remittance basis, where non-doms could avoid paying UK tax on foreign income unless they brought it into the UK.
Since April 2025, the remittance basis no longer exists. Instead, a new four-year Foreign Income and Gains (FIG) regime will provide relief for certain individuals.
It marks a major shift for wealthy individuals who’ve used non-dom status to protect offshore income. Some are now looking at relocating to places like Italy or Portugal, where the tax systems are a bit more generous for expats or returning residents.
While this change might feel aimed at the ultra-wealthy, it’s a wake-up call for anyone who moves around a lot or has income sources in more than one country. Even if you’re not a millionaire, if you’re in the UK long enough, your whole financial life can be brought under HMRC’s umbrella.
RECORDS, FORMS, AND FILING
If you’re an expat or move around a lot, detailed record-keeping is non-negotiable. You should keep clear and accurate records of the following details.
- Travel dates – every time you come and go from the UK, logged and colour-coded in a spreadsheet.
- Workdays – not just if you worked, but where you were while doing it.
- Housing – where you stayed, and whether it counts as an “available home” under the rules.
- Family ties – if your partner or kids are in the UK, that can tip your residency status too.
If they ask you for proof of residence, HMRC doesn’t want stories—they want data. Having everything recorded in a clear timeline can save you hours of stress and a larger than necessary tax bill.
When it comes to forms and filing, if your residency affects what’s on your tax return, you’ll need to include an SA109 form. You can’t file that through HMRC’s normal government gateway system. Instead, you’ve got three options:
- File a paper return—but the deadline’s earlier (October 31st),
- Use commercial software that supports SA109,
- Or, hire a tax adviser and let them handle it.
As for telling HMRC, there’s no legal requirement to wave a flag and announce you’ve left the country unless your return is affected. However, if you’re not filing a return and just want to tie things off, you can use a P85 form when you leave. You might even get a tax refund if you’ve overpaid.
Before you pack your bags or file your next return, make sure your residency status is water-tight. If you want expert, personalised guidance on your UK residency position and next steps, then speak to an Aria adviser today.
