Sufficient Ties Test and UK Non Resident Tax
If the Automatic Residence Test (ART) does not qualify you as UK non resident, you must also pass the Sufficient Ties Test (STT), which determines whether you will be considered a UK resident through sufficient connections.
Legislation related to UK residence has an adhesive nature once you’ve gained tax resident status in the UK, it’s difficult to lose it.
How do you pass the Sufficient Ties Test?
There are five ‘tests’ which determined how tied you are to the UK and, therefore, how likely you are to be considered UK resident for tax purposes.
- Family
In this instance, ‘family’ is defined as a civil partner, spouse or partner that you are living with as a spouse or civil partner. If this family member is a UK resident during the tax year in question, then they are considered a ‘family tie’. If you are legally separated, this no longer applies, but you will need the relevant paperwork (deed of separation or court order).
This test also applies to your children (under 18s) that are resident in the UK and you spend more than 61 days with them in the UK during the tax year. If you spend less than 61 days with them in the UK, this rule no longer applies. Once they turn 18, this rule no longer applies to you, except for the portion of the tax year before their actual birthday.
2. Work
A work tie with the UK is defined as employed or self employed work for at least three hours per day, for 40 days of the tax year. This includes tax deductible or employer paid job related training, travel time spent working or travel that is a deductible expense for you. It does not include voluntary work that has no contract of service.
3. Accommodation
You will be considered to have an accommodation tie to the UK if you have somewhere to live for 91 consecutive days of the tax year and you spend one, or more, nights there. This includes homes of close relatives if you spent 16, or more, nights there during the tax year. A close relative is considered to be your siblings, parents, grandparents, children (over 18s), grandchildren (over 18s) that are related to you by blood, adoption or marriage.
4. Number of days spent in the UK
The ’90-day tie’ is applicable if you spent a minimum of 90 days in the UK during each of the preceding two tax years.
5. The ‘country tie’, or whether you spend more time in the UK than elsewhere
This does not apply for those who have been non-UK resident for the entirety of the previous 3 tax years.
Do I have to pass all five tests?
The application of the ties tests depends on whether you were UK resident during one or more of the previous 3 tax years.
According to the STT, residency for those who have lived in the UK during the past three tax years depends on the number of days spent in the UK. In general, the more ties you have to the UK, the fewer days you can spend in the UK without becoming resident for tax purposes.
If you were UK resident for at least one of the previous 3 tax years
Under this circumstance, all five ties are considered and applied:
- If you have four or more ties to the UK, spending 16 to 45 days inclusive in the UK will make you resident.
- If you have three ties to the UK, spending 46 to 90 days inclusive in the UK will make you resident.
- If you have two ties to the UK, spending 91 to 120 days inclusive in the UK will make you resident.
- If you have one tie to the UK, spending more than 120 days in the UK will make you resident. In this circumstance, only four ties are considered, and the country tie is ignored:
If you have NOT been UK resident for the previous 3 tax years
- If you have all four ties to the UK, spending 46 to 90 days inclusive in the UK will make you resident.
- If you have three ties to the UK, spending 91 to 120 days inclusive in the UK will make you resident.
- If you have two ties to the UK, spending more than 120 days in the UK will make you resident.
