Tax Residence – Determining if You Must Pay Tax in the UK

Keywords – Tax Residence

Residence status has an affect on where you pay your taxes. These taxes can be applied to income from within and outside the country. In this blog, we will be covering UK laws regarding tax residence.

To begin, if you are a non-UK resident earning your money abroad, you do not pay any taxes on your foreign income.

Let’s look into what classifies as a UK residency status.

Residence Status

You are a UK resident is you spend 183 days or more between 6 April and 5 April in the UK. 

The rules are slightly different if you own, rent, or live in a house in the UK. In such cases, you must have stayed 30 days between 6 April and 5 April to be classified as a UK resident, while holding the residence for 91 days within the tax year. 

In addition, if you work full time abroad, defined as a minimum of 35 hours a week,  and live in the UK less than 91 days a year, out of which no more than 30 were spent working, you are automatically a non-resident. The same condition applies if you have stayed less than 16 days in the UK in the past 3 tax years. 

The rules apply to all forms of income, including capital gains

Split Residence

If you move in and out of the UK, you may be eligible for the ‘split year treatment’. 

In such cases, your year is divided into two segments – one where you lived in the UK and one where you did not. Under these circumstances, you only pay taxes on the UK living segment.

Here, please keep in mind that in order to qualify for a split residence, you must have lived abroad for a complete tax year (6 April to 5 April).

In addition, your status might also change if you buy or sell a property in the UK, change your job, or get married, among other specifics. Please get in touch to learn more about these specifics. 

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