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Finance Bill
Schedule 43 — Statutory residence test
Part 1 — The rules

504

 

when P is present there on that day for at least some of the time (no matter

how short a time).

      (6)  

In sub-paragraphs (4) and (5)—

(a)   

a reference to 30 days is to 30 days in aggregate, whether the days are

consecutive or intermittent, and

5

(b)   

a reference to P being present at the home is to P being present there

at a time when it is a home of P’s (so presence there on any other

occasion, for example to look round the property with a view to

buying it, is to be disregarded).

      (7)  

Sub-paragraph (1)(c) is satisfied so long as there is a period of 91 days in

10

respect of which the conditions described there are met, even if those

conditions are in fact met for longer than that.

      (8)  

If P has more than one home in the UK—

(a)   

each of those homes must be looked at separately to see if the second

automatic UK test is met, and

15

(b)   

the second automatic UK test is then met so long as it is met in

relation to at least one of those homes.

9     (1)  

The third automatic UK test is that—

(a)   

P works sufficient hours in the UK, as assessed over a period of 365

days,

20

(b)   

during that period, there are no significant breaks from UK work,

(c)   

all or part of that period falls within year X,

(d)   

more than 75% of the total number of days in the 365-day period on

which P does more than 3 hours’ work are days on which P does

more than 3 hours’ work in the UK, and

25

(e)   

at least one day which falls in both that period and year X is a day on

which P does more than 3 hours’ work in the UK.

      (2)  

Take the following steps to work out, for any given period of 365 days,

whether P works “sufficient hours in the UK” as assessed over that period—

           

Step 1

30

           

Identify any days in the period on which P does more than 3 hours’ work

overseas, including ones on which P also does work in the UK on the same

day.

           

The days so identified are referred to as “disregarded days”.

           

Step 2

35

           

Add up (for all employments held and trades carried on by P) the total

number of hours that P works in the UK during the period, but ignoring any

hours that P works in the UK on disregarded days.

           

The result is referred to as P’s “net UK hours”.

           

Step 3

40

           

Subtract from 365—

(a)   

the total number of disregarded days, and

(b)   

any days that are allowed to be subtracted, in accordance with the

rules in paragraph 28 of this Schedule, to take account of periods of

leave and gaps between employments.

45

           

The result is referred to as the “reference period”.

           

Step 4

 
 

Finance Bill
Schedule 43 — Statutory residence test
Part 1 — The rules

505

 

           

Divide the reference period by 7. If the answer is more than 1 and is not a

whole number, round down to the nearest whole number. If the answer is

less than 1, round up to 1.

           

Step 5

           

Divide P’s net UK hours by the number resulting from step 4.

5

           

           

If the answer is 35 or more, P is considered to work “sufficient hours in the

UK” as assessed over the 365-day period in question.

      (3)  

This paragraph does not apply to P if—

(a)   

P has a relevant job on board a vehicle, aircraft or ship at any time in

10

year X, and

(b)   

at least 6 of the trips that P makes in year X as part of that job are

cross-border trips that either begin in the UK, end in the UK or begin

and end in the UK.

10    (1)  

The fourth automatic UK test is that—

15

(a)   

P dies in year X,

(b)   

for each of the previous 3 tax years, P was resident in the UK by

virtue of meeting the automatic residence test,

(c)   

even assuming P were not resident in the UK for year X, the tax year

preceding year X would not be a split year as respects P (see Part 3 of

20

this Schedule),

(d)   

when P died, either—

(i)   

P’s home was in the UK, or

(ii)   

P had more than one home and at least one of them was in the

UK, and

25

(e)   

if P had a home overseas during all or part of year X, P did not spend

a sufficient amount of time there in year X.

      (2)  

In relation to a home of P’s overseas, P “spent a sufficient amount of time”

there in year X if—

(a)   

there were at least 30 days in year X when P was present there on that

30

day for at least some of the time (no matter how short a time), or

(b)   

P was present there for at least some of the time (no matter how short

a time) on each day of year X up to and including the day on which

P died.

      (3)  

In sub-paragraph (2)—

35

(a)   

the reference to 30 days is to 30 days in aggregate, whether the days

were consecutive or intermittent, and

(b)   

the reference to P being present at the home is to P being present

there at a time when it was a home of P’s.

      (4)  

If P had more than one home overseas—

40

(a)   

each of those homes must be looked at separately to see if the

requirement of sub-paragraph (1)(e) is met, and

(b)   

that requirement is then met so long as it is met in relation to each of

them.

The automatic overseas tests

45

11         

There are 5 automatic overseas tests.

 
 

Finance Bill
Schedule 43 — Statutory residence test
Part 1 — The rules

506

 

12         

The first automatic overseas test is that—

(a)   

P was resident in the UK for one or more of the 3 tax years preceding

year X,

(b)   

the number of days in year X that P spends in the UK is less than 16,

and

5

(c)   

P does not die in year X.

13         

The second automatic overseas test is that—

(a)   

P was resident in the UK for none of the 3 tax years preceding year

X, and

(b)   

the number of days that P spends in the UK in year X is less than 46.

10

14    (1)  

The third automatic overseas test is that—

(a)   

P works sufficient hours overseas, as assessed over year X,

(b)   

during year X, there are no significant breaks from overseas work,

(c)   

the number of days in year X on which P does more than 3 hours’

work in the UK is less than 31, and

15

(d)   

the number of days in year X falling within sub-paragraph (2) is less

than 91.

      (2)  

A day falls within this sub-paragraph if—

(a)   

it is a day spent by P in the UK, but

(b)   

it is not a day that is treated under paragraph 23(4) as a day spent by

20

P in the UK.

      (3)  

Take the following steps to work out whether P works “sufficient hours

overseas” as assessed over year X—

           

Step 1

           

Identify any days in year X on which P does more than 3 hours’ work in the

25

UK, including ones on which P also does work overseas on the same day.

           

The days so identified are referred to as “disregarded days”.

           

Step 2

           

Add up (for all employments held and trades carried on by P) the total

number of hours that P works overseas in year X, but ignoring any hours

30

that P works overseas on disregarded days.

           

The result is referred to as P’s “net overseas hours”.

           

Step 3

           

Subtract from 365 (or 366 if year X includes 29 February)—

(a)   

the total number of disregarded days, and

35

(b)   

any days that are allowed to be subtracted, in accordance with the

rules in paragraph 28 of this Schedule, to take account of periods of

leave and gaps between employments.

           

The result is referred to as the “reference period”.

           

Step 4

40

           

Divide the reference period by 7. If the answer is more than 1 and is not a

whole number, round down to the nearest whole number. If the answer is

less than 1, round up to 1.

           

Step 5

           

Divide P’s net overseas hours by the number resulting from step 4.

45

           

           

If the answer is 35 or more, P is considered to work “sufficient hours

overseas” as assessed over year X.

 
 

Finance Bill
Schedule 43 — Statutory residence test
Part 1 — The rules

507

 

      (4)  

This paragraph does not apply to P if—

(a)   

P has a relevant job on board a vehicle, aircraft or ship at any time in

year X, and

(b)   

at least 6 of the trips that P makes in year X as part of that job are

cross-border trips that either begin in the UK, end in the UK or begin

5

and end in the UK.

15    (1)  

The fourth automatic overseas test is that—

(a)   

P dies in year X,

(b)   

P was resident in the UK for neither of the 2 tax years preceding year

X or, alternatively, P’s case falls within sub-paragraph (2), and

10

(c)   

the number of days that P spends in the UK in year X is less than 46.

      (2)  

P’s case falls within this sub-paragraph if—

(a)   

P was not resident in the UK for the tax year preceding year X, and

(b)   

the tax year before that was a split year as respects P because the

circumstances of the case fell within Case 1, Case 2 or Case 3 (see Part

15

3 of this Schedule).

16    (1)  

The fifth automatic overseas test is that—

(a)   

P dies in year X,

(b)   

P was resident in the UK for neither of the 2 tax years preceding year

X because P met the third automatic overseas test for each of those

20

years or, alternatively, P’s case falls within sub-paragraph (2), and

(c)   

P would meet the third automatic overseas test for year X if

paragraph 14 were read with the relevant modifications.

      (2)  

P’s case falls within this sub-paragraph if—

(a)   

P was not resident in the UK for the tax year preceding year X

25

because P met the third automatic overseas test for that year, and

(b)   

the tax year before that was a split year as respects P because the

circumstances of the case fell within Case 1 (see Part 3 of this

Schedule).

      (3)  

The relevant modifications of paragraph 14 are—

30

(a)   

in sub-paragraph (1)(a) and (b) and sub-paragraph (3), for “year X”

read “the period from the start of year X up to and including the day

before the day of P’s death”, and

(b)   

in step 3 of sub-paragraph (3), for “365 (or 366 if year X includes 29

February)” read “the number of days in the period from the start of

35

year X up to and including the day before the day of P’s death”.

The sufficient ties test

17    (1)  

The sufficient ties test is met for year X if—

(a)   

P meets none of the automatic UK tests and none of the automatic

overseas tests, but

40

(b)   

P has sufficient UK ties for that year.

      (2)  

“UK ties” is defined in Part 2 of this Schedule.

      (3)  

Whether P has “sufficient” UK ties for year X will depend on—

(a)   

whether P was resident in the UK for any of the previous 3 tax years,

and

45

 
 

Finance Bill
Schedule 43 — Statutory residence test
Part 1 — The rules

508

 

(b)   

the number of days that P spends in the UK in year X.

      (4)  

The Tables in paragraphs 18 and 19 show how many ties are sufficient in

each case.

Sufficient UK ties

18         

The Table below shows how many UK ties are sufficient in a case where P

5

was resident in the UK for one or more of the 3 tax years preceding year X—

 

Days spent by P in the UK

Number of ties that are

 
 

in year X

sufficient

 
 

More than 15 but not

At least 4

 
 

more than 45

  

10

 

More than 45 but not

At least 3

 
 

more than 90

  
 

More than 90 but not

At least 2

 
 

more than 120

  
 

More than 120

At least 1

 

15

    

19         

The Table below shows how many UK ties are sufficient in a case where P

was resident in the UK for none of the 3 tax years preceding year X—

 

Days spent by P in the UK

Number of ties that are

 
 

in year X

sufficient

 

20

 

More than 45 but not

All 4

 
 

more than 90

  
 

More than 90 but not

At least 3

 
 

more than 120

  
 

More than 120

At least 2

 

25

    

20    (1)  

If P dies in year X, paragraph 18 has effect as if the words “More than 15 but”

were omitted from the first column of the Table.

      (2)  

In addition to that modification, if the death occurs before 1 March in year

X, paragraphs 18 and 19 have effect as if each number of days mentioned in

30

the first column of the Table were reduced by the appropriate number.

      (3)  

The appropriate number is found by multiplying the number of days, in

each case, by—equation: over[char[A],num[12.0000000000000000,"12"]]

           

where “A” is the number of whole months in year X after the month in which

P dies.

35

 
 

Finance Bill
Schedule 43 — Statutory residence test
Part 2 — Key concepts

509

 

      (4)  

If, for any number of days, the appropriate number is not a whole number,

the appropriate number is to be rounded up or down as follows—

(a)   

if the first figure after the decimal point is 5 or more, round the

appropriate number up to the nearest whole number,

(b)   

otherwise, round it down to the nearest whole number.

5

Part 2

Key concepts

Introduction

21         

This Part of this Schedule defines some key concepts for the purposes of this

Schedule.

10

Days spent

22    (1)  

If P is present in the UK at the end of a day, that day counts as a day spent

by P in the UK.

      (2)  

But it does not do so in the following two cases.

      (3)  

The first case is where—

15

(a)   

P only arrives in the UK as a passenger on that day,

(b)   

P leaves the UK the next day, and

(c)   

between arrival and departure, P does not engage in activities that

are to a substantial extent unrelated to P’s passage through the UK.

      (4)  

The second case is where—

20

(a)   

P would not be present in the UK at the end of that day but for

exceptional circumstances beyond P’s control that prevent P from

leaving the UK, and

(b)   

P intends to leave the UK as soon as those circumstances permit.

      (5)  

Examples of circumstances that may be “exceptional” are—

25

(a)   

national or local emergencies such as war, civil unrest or natural

disasters, and

(b)   

a sudden or life-threatening illness or injury.

      (6)  

For a tax year—

(a)   

the maximum number of days to which sub-paragraph (2) may

30

apply in reliance on sub-paragraph (4) is limited to 60, and

(b)   

accordingly, once the number of days within sub-paragraph (4)

reaches 60 (counting forward from the start of the tax year), any

subsequent days within that sub-paragraph, whether involving the

same or different exceptional circumstances, will count as days spent

35

by P in the UK.

23    (1)  

If P is not present in the UK at the end of a day, that day does not count as a

day spent by P in the UK.

      (2)  

This is subject to the deeming rule.

      (3)  

The deeming rule applies if—

40

(a)   

P has at least 3 UK ties for a tax year,

 
 

Finance Bill
Schedule 43 — Statutory residence test
Part 2 — Key concepts

510

 

(b)   

the number of days in that tax year when P is present in the UK at

some point in the day but not at the end of the day (“qualifying

days”) is more than 30, and

(c)   

P was resident in the UK for at least one of the 3 tax years preceding

that tax year.

5

      (4)  

The deeming rule is that, once the number of qualifying days in the tax year

reaches 30 (counting forward from the start of the tax year), each subsequent

qualifying day in the tax year is to be treated as a day spent by P in the UK.

      (5)  

The deeming rule does not apply for the purposes of sub-paragraph (3)(a)

(so, in deciding for those purposes whether P has a 90-day tie, qualifying

10

days in excess of 30 are not to be treated as days spent by P in the UK).

Days spent “in” a period

24         

Any reference to a number of days spent in the UK “in” a given period is a

reference to the total number of days spent there (in aggregate) in that

period, whether continuously or intermittently.

15

Home

25    (1)  

A person’s home could be a building or part of a building or, for example, a

vehicle, vessel or structure of any kind.

      (2)  

Whether, for a given building, vehicle, vessel, structure or the like, there is a

sufficient degree of permanence or stability about P’s arrangements there for

20

the place to count as P’s home (or one of P’s homes) will depend on all the

circumstances of the case.

      (3)  

But somewhere that P uses periodically as nothing more than a holiday

home or temporary retreat (or something similar) does not count as a home

of P’s.

25

      (4)  

A place may count as a home of P’s whether or not P holds any estate or

interest in it (and references to “having” a home are to be read accordingly).

      (5)  

Somewhere that was P’s home does not continue to count as such merely

because P continues to hold an estate or interest in it after P has moved out

(for example, if P is in the process of selling it or has let or sub-let it, having

30

set up home elsewhere).

Work

26    (1)  

P is considered to be “working” (or doing “work”) at any time when P is

doing something—

(a)   

in the performance of duties of an employment held by P, or

35

(b)   

in the course of a trade carried on by P (alone or in partnership).

      (2)  

In deciding whether something is being done in the performance of duties

of an employment, regard must be had to whether, if value were received by

P for doing the thing, it would fall within the definition of employment

income in section 7 of ITEPA 2003.

40

      (3)  

In deciding whether something is being done in the course of a trade, regard

must be had to whether, if expenses were incurred by P in doing the thing,

 
 

 
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