Residence test for overseas work but UK home

[RichTT]

I'm looking at a potential full time working position overseas and I'm trying to wrap my head around how many days I can actually be in the UK without being classed as a resident for tax purposes. During this period my better half will likely reside in the UK property for at least half of the year, with no UK income. I've been tax resident in the UK for 20 years now.

https://www.gov.uk/government/publications/rdr3-st...

Under the SRT we have automatic overseas tests, so as I can see:

2.1 - First automatic test - Fail - I will likely be in the UK over 16 days in a year
2.2 - Second automatic test - Fail - I have been a tax resident in the previous 3 tax years
2.3 - Third Automatic test - Pass - based on the below criteria, no UK work, no significant break, and less than 91 days.

- you spend fewer than 91 days in the UK in the tax year - yes
- the number of days on which you work for more than 3 hours in the UK is less than 31 - yes
- there is no significant break from your overseas work - yes

To me that would mean that as long as I am present in the UK for less than 91 calendar days in the tax year, I am tax exempt.

We also have the Automatic UK tests:

3.1 - First automatic test - Pass - I will not be in the UK for over 183 days
3.2 - Second automatic test - Unknown - Likelihood I could be in the UK for 30 days in my own home, only renting overseas.

- there is or was at least one period of 91 consecutive days when you had a home in the UK - yes
- at least 30 of these 91 days fall in the tax year when you have a home in the UK and you’ve been present in that home for at least 30 days at any time during the year - possibility
- at that time you had no overseas home, or if you had an overseas home, you were present in it for fewer than 30 days in the tax year - unknown

3.3 - Third Automatic test - Pass - I won't be working in the UK

What are HMRC classing as an overseas home? Is this a bought property, a rented property (apartment etc)?

So my confusion is that by the Automatic Overseas testing I would be classed as non-resident.

By the Automatic UK testing I could be a tax resident if I visit my own home for 30 days if they do not class a rented apartment overseas a 'home'. I'm hoping that a rental agreement would be sufficient to prove this.

If I fail the automatic UK testing, but pass the Overseas testing, I would then be looking at going on the sufficient ties testing?

[ecs]

The KPMG flowchart is far easier to digest:

https://assets.kpmg.com/content/dam/kpmg/pdf/2016/...

If you pass (or is it fail?) any of the first three automatic tests, you're non-resident.

[RichTT]

Thanks for that.

3: Leave UK to work full-time overseas, present in UK < 91 days and < 31 days spent working in UK

Looks like that third test would see me pass the overseas test for residency as long as I'm out in the UK less than 91 days.

Absolute nonsense how complicated UK tax law is. 21,000 pages long! Singapore's tax laws are 300 pages.

[ecs]

HMRC also have a tool for it - you can try different values, but if you stick in the 90/30 day rule it confirms it's a valid solution:

https://www.gov.uk/tax-foreign-income/residence

[RichTT]

Appreciate it, seems i should be good.

Now I just need to convince the missus....

[Ezra]

I lived o'seas in 3 diff countries over a period of 11 years. The key for me was not returning to UK for more than 90 days per year. Towards the end I had to keep a very close eye on things as circumstances dictated I travelled back most weekends from Switzerland, and spent vacation time in UK too. My employer had KPMG to help with tax issues and they had a great diary app that tracked it all for me. But, the key issue was the 90 day time limit to ensure non-residency for tax purposes

[SaulGoodman]

Make sure you also understand the split year treatment - you need to be out a full tax year for that to apply. Simple in principle but it does catch people out. As long as you are working outside the UK for tax year 25-26 you don't need to worry about paying UK tax on your foreign income in the tax years either side. If you come back before April 2026 you'd have a chunk of tax to pay on the foreign income most likely.

[Mr Pointy]

SaulGoodman said:

Make sure you also understand the split year treatment - you need to be out a full tax year for that to apply. Simple in principle but it does catch people out. As long as you are working outside the UK for tax year 25-26 you don't need to worry about paying UK tax on your foreign income in the tax years either side. If you come back before April 2026 you'd have a chunk of tax to pay on the foreign income most likely.

Note this point - it's a really good idea to be out of the country by April 5th.

Also note that a "day" means the night so if you arrive on Saturday, spend the night here & fly out on Sunday that's one day.

[GT03ROB]

If you are truly working full time overseas it really is pretty straightforward. Just don’t come back for more than 90 days. I’ve been non-res for most of the last 10yrs & a numerous occasions before that. Under certain circumstances you can push that up but don;t count on it without proper advice.

[TownIdiot]

Mr Pointy said:

SaulGoodman said:

Make sure you also understand the split year treatment - you need to be out a full tax year for that to apply. Simple in principle but it does catch people out. As long as you are working outside the UK for tax year 25-26 you don't need to worry about paying UK tax on your foreign income in the tax years either side. If you come back before April 2026 you'd have a chunk of tax to pay on the foreign income most likely.

Note this point - it's a really good idea to be out of the country by April 5th.

Also note that a "day" means the night so if you arrive on Saturday, spend the night here & fly out on Sunday that's one day.

Good point this.
If the job starts in September for example you will miss out for the first year.

[GT03ROB]

TownIdiot said:

Mr Pointy said:

SaulGoodman said:

Make sure you also understand the split year treatment - you need to be out a full tax year for that to apply. Simple in principle but it does catch people out. As long as you are working outside the UK for tax year 25-26 you don't need to worry about paying UK tax on your foreign income in the tax years either side. If you come back before April 2026 you'd have a chunk of tax to pay on the foreign income most likely.

Note this point - it's a really good idea to be out of the country by April 5th.

Also note that a "day" means the night so if you arrive on Saturday, spend the night here & fly out on Sunday that's one day.

Good point this.
If the job starts in September for example you will miss out for the first year.

I know there have been changes recently to split year treatment, but that certainly didn’t used to be true. The logic was you were non-resident from the moment you started to work full time overseas, provided you subsequently completed a full tax year as non-resident.

[TownIdiot]

GT03ROB said:

I know there have been changes recently to split year treatment, but that certainly didn’t used to be true. The logic was you were non-resident from the moment you started to work full time overseas, provided you subsequently completed a full tax year as non-resident.

Surely you would have already spent more than the allowed days in the country for that tax year?

[GT03ROB]

TownIdiot said:

GT03ROB said:

I know there have been changes recently to split year treatment, but that certainly didn’t used to be true. The logic was you were non-resident from the moment you started to work full time overseas, provided you subsequently completed a full tax year as non-resident.

Surely you would have already spent more than the allowed days in the country for that tax year?

Thats the whole point of spit year treatment. You can claim non-residence from the point you take up full time overseas work irrespective when it starts. This does not entitle you to 90 days in the UK from then until the end of that tax year, its reduced based on how far into the tax year you are.

You still have to work full time overseas for a complete tax year however. So working full time overseas from 7th April 2024 to 3rd April 2026 would technically mean you would stay UK tax resident Whereas 3rd April 2024 to 7th April 2025 would be non resident for the full period even though you were working overseas for a year less.

[SaulGoodman]

GT03ROB said:

Thats the whole point of spit year treatment. You can claim non-residence from the point you take up full time overseas work irrespective when it starts. This does not entitle you to 90 days in the UK from then until the end of that tax year, its reduced based on how far into the tax year you are.

You still have to work full time overseas for a complete tax year however. So working full time overseas from 7th April 2024 to 3rd April 2026 would technically mean you would stay UK tax resident Whereas 3rd April 2024 to 7th April 2025 would be non resident for the full period even though you were working overseas for a year less.

This is what I meant. Depending on timing it can be almost two years before you tick the split year box. First time we lived abroad we hadn't picked up on that part, but luckily were out the full tax year anyway. It's definitely something that catches people out.