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Are you a resident of the UK for Tax purposes?

February 12, 2019 | Latest Thinking, News, Taxation

What are the ways to determine if you are a resident of the UK strictly for Tax purposes?

If you are living within the UK, then your ‘residency status’ will ultimately determine what sources of income will be included in your taxes. However, all individuals residing within the UK are still subjected to the same tax rate, regardless of their residency status.

A UK resident for tax purposes will be taxed predominately upon their ‘worldwide’ income, unlike a Non-UK resident who shall only be taxed upon the income earned whilst they are within the UK.

So, what are the ways to determine whether you a UK Tax payer based upon residency status or not?

There are three rules to consider automatically when determining a residency status:

  1. Duration – An individual must have lived within the UK for at least 183 days during a tax year so to be classed as a UK tax resident.
  2. Homeowner – If an individual inhabits for at least 91 ‘consecutive’ days their own purchased home within the UK, in which 30 days of this must be within a tax year, they will be considered as an UK tax resident.
  3. Employment – Anyone working within the UK for at least 356 days without a ‘significant’ break, in which at least 274 days must be within a tax year, then they may be labelled as a UK tax resident.

However, if an individual doesn’t fit into any of the three rules mentioned, they may still be considered as a tax resident if they have any associations that links the individual to the UK, such as through family, work, accommodation or so forth.

If you would like to discuss this article further or have any general legal enquiries, please contact one of our highly qualified solicitors on 020 3318 5794 or via email at londoninfo@hudsonmckenzie.com

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