What is the Statutory Residence Test and how does it determine UK tax residency?

The Statutory Residence Test (SRT) is a three-part test that determines whether you are UK tax resident for a given tax year. First, the automatic overseas test: if you spend fewer than 16 days in the UK (or 46 days if not resident in any of the previous three years), you are automatically non-resident. Second, the automatic UK test: if you spend 183+ days in the UK, you are automatically resident. Third, if neither automatic test is conclusive, the sufficient ties test counts your UK connections (family, accommodation, work, 90-day, and country ties) against your UK days. More ties means fewer days allowed before you become resident. For a previously resident person with four ties, as few as 16 UK days can make you tax resident.

What counts as a UK tie for the Statutory Residence Test?

The five UK ties are: family tie (spouse, civil partner, or minor children living in the UK), accommodation tie (UK accommodation available for 91+ continuous days that you use for at least one night), work tie (working in the UK for 40+ days in the tax year), 90-day tie (spending 90+ days in the UK in either of the previous two tax years), and country tie (spending more days in the UK than any other single country, only relevant if previously UK resident).

What is split year treatment and how does it work?

Split year treatment allows you to divide a tax year into a UK part and an overseas part. During the overseas part, you are only taxed on UK-source income. There are eight cases for split year treatment. The most common for business owners leaving the UK is Case 1 (starting full-time work overseas) or Case 3 (ceasing to have a UK home). Split year treatment is automatic if you meet the conditions — you do not need to apply for it.

Does a day in the UK count if I arrive after midnight?

A UK day is any day you are present in the UK at midnight. Arrival and departure days where you are not present at midnight do not count, unless the 'deeming rule' applies: if you have three or more UK ties and are present on more than 30 days that would otherwise not count, those additional days beyond 30 are added to your day count.

What is the automatic overseas test?

The automatic overseas test makes you automatically non-UK resident if any of these apply: you were UK resident in none of the previous three tax years and spend fewer than 46 days in the UK; you were UK resident in one or more of the previous three tax years and spend fewer than 16 days in the UK; or you work full-time overseas and spend fewer than 91 days in the UK with no more than 30 UK work days.

Can HMRC challenge my non-resident status?

Yes. HMRC can investigate your residence status, and the burden of proof is on you. You must keep detailed records of your UK days, travel dates (airline boarding passes, passport stamps), UK ties, and overseas work evidence. If HMRC finds you miscounted days or failed to account for a tie, they can reclassify you as UK resident and tax your worldwide income for that entire tax year.

What is the temporary non-residence rule?

If you leave the UK and return within five complete tax years, the temporary non-residence rule can tax certain income and gains from the non-resident period when you return. This primarily affects capital gains on assets owned before departure, certain pension income, and dividend income from close companies. The rule exists to prevent people from briefly leaving the UK to realise gains tax-free.

Statutory Residence Test Explained: UK Expat Guide (2026)

If you are a UK business owner planning to move abroad — whether to Dubai, Portugal, or anywhere else — the Statutory Residence Test is the single most important piece of tax legislation you need to understand. Get it wrong and HMRC taxes your worldwide income. Get it right and you can legitimately reduce your UK tax to zero.

This guide explains every part of the SRT in plain English, with worked examples for agency owners. We cover the automatic tests, the five UK ties, day counting rules (including the midnight rule and deeming rule), split year treatment, and the temporary non-residence anti-avoidance rule.

Part of our Dubai relocation series

This article is a deep dive into one element of moving abroad as a UK business owner. For the complete picture, read our comprehensive Dubai relocation guide. See also: Free Zone vs Mainland and UAE Corporate Tax Guide.

What Is the Statutory Residence Test (SRT)?

The Statutory Residence Test (SRT) was introduced in April 2013 to replace the old, vague guidance on UK tax residency. Before the SRT, determining residence was based on case law and HMRC practice — leaving enormous grey areas that led to expensive disputes.

The SRT provides a structured, rules-based framework. It answers one question: are you UK tax resident for a given tax year? If you are resident, HMRC can tax your worldwide income and capital gains. If you are non-resident, you are generally only taxed on UK-source income.

The test operates in three stages, applied in order:

Automatic overseas test — if you meet any condition, you are automatically non-resident
Automatic UK test — if you meet any condition, you are automatically UK resident
Sufficient ties test — if neither automatic test is conclusive, count your UK ties and compare against your UK days

You work through the tests in that order. If the first test gives a definitive answer, you stop. You only reach the sufficient ties test if neither automatic test applies.

The Automatic Overseas Test

You are automatically non-UK resident if any of the following apply:

Automatic Overseas Test Conditions

First automatic overseas test

You were UK resident in one or more of the three previous tax years and you spend fewer than 16 days in the UK in the current tax year.

Second automatic overseas test

You were UK resident in none of the three previous tax years and you spend fewer than 46 days in the UK.

Third automatic overseas test (full-time overseas work)

You work full-time overseas, spend fewer than 91 days in the UK, and no more than 30 of those are UK work days.

For most UK business owners moving to Dubai in their first year, the third test is the most relevant. You've been UK resident recently (so you cannot use the 46-day test), and staying under 16 days is extremely restrictive. But if you work full-time overseas and limit your UK visits to under 91 days (with no more than 30 work days), you pass.

Practical tip: "Full-time overseas work" means averaging 35+ hours per week over the period. If you are running your agency from Dubai, this is straightforward to demonstrate — keep records of your working patterns, client calls, and UAE office attendance.

The Automatic UK Test

You are automatically UK resident if any of the following apply:

You spend 183 days or more in the UK in the tax year
You have a UK home for a continuous period of 91+ days, are present in it for 30+ days, and have no overseas home (or have an overseas home but are present in it for fewer than 30 days)
You work full-time in the UK for any 365-day period that falls partly within the tax year

The 183-day rule is the one most people know. But the UK home test catches people who assume they are non-resident just because they have moved abroad — if you keep a UK property available and visit regularly, you could still be caught.

Key point for agency owners: if you keep your UK house and do not rent it out or sell it, it remains "available accommodation." If you visit it for 30+ days in the tax year, you could fail the automatic UK test regardless of how many days you spend in total.

The Sufficient Ties Test: The Grey Area

If neither automatic test gives a definitive answer, the sufficient ties test determines your residence. This is where it gets nuanced. The test counts your UK ties and compares them against the number of days you spend in the UK.

The Five UK Ties

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Family tie

Your spouse, civil partner, or minor child lives in the UK. A minor child counts only if you see them for 61+ days in the tax year (or would, absent special circumstances).

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Accommodation tie

You have UK accommodation available for a continuous period of 91+ days, and you stay at least one night during the tax year. This includes a home you own, a relative's home, or even a friend's spare room.

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Work tie

You work in the UK for 40 or more days in the tax year. A "work day" is any day you do more than 3 hours of UK work. This includes client meetings, pitches, and working from a UK co-working space.

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90-day tie

You spent 90 or more days in the UK in either (or both) of the two previous tax years.

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Country tie

You spent more days in the UK than in any other single country. This tie only applies if you were UK resident in one or more of the previous three tax years.

How Ties and Days Interact

The more UK ties you have, the fewer days you can spend in the UK before becoming resident. There are two columns — one for people who were UK resident in any of the previous three tax years ("previously resident"), and one for those who were not ("not previously resident").

UK Ties	Previously Resident	Not Previously Resident
0 ties	Resident if 183+ days	Always non-resident*
1 tie	Resident if 121+ days	Resident if 183+ days
2 ties	Resident if 91+ days	Resident if 121+ days
3 ties	Resident if 46+ days	Resident if 91+ days
4+ ties	Resident if 16+ days	Resident if 46+ days

* Assuming automatic UK test not met. Source: HMRC RDR3 guidance note.

The danger zone for agency owners

Most UK agency owners moving to Dubai will have been previously resident and will retain 3–4 ties (family, accommodation, 90-day, and possibly country tie in year one). With 4 ties, just 16 days in the UK makes you resident. This means roughly one short UK trip per quarter — and even then you need to count days carefully.

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How Are UK Days Counted? The Midnight Rule and Deeming Rule

The midnight rule

A "UK day" is any day you are present in the UK at midnight. This means:

If you arrive in the UK at 10pm and leave at 6am the next morning, one day counts (the midnight you were present)
If you arrive at 2pm and leave before midnight the same day, zero days count
Transit days where you pass through a UK airport but do not clear immigration do not count

Practical tip: some people try to game this by booking late flights out of the UK before midnight. HMRC is aware of this tactic. While the midnight rule is the legal test, keep clear records of your flight bookings, boarding passes, and departure times in case HMRC challenges your day count.

The deeming rule

The deeming rule is an anti-avoidance provision. If you have three or more UK ties and the number of days you spend in the UK that would not otherwise count (because you were not present at midnight) exceeds 30, each additional day beyond 30 is added to your day count.

In practice, this catches people who fly in and out on the same day to avoid midnight presence. If you are doing frequent day trips to the UK for client meetings, beware — more than 30 such trips and the extra days start counting against you.

What counts as a UK work day?

A UK work day is any day on which you do more than 3 hours of work in the UK. This includes:

Client meetings, even informal ones
Working from a UK office or co-working space
Taking calls or doing emails from a UK location (if it exceeds 3 hours)
Attending a UK conference or networking event as part of your business

It does not include checking emails on your phone during a social visit, provided it takes less than 3 hours.

Split Year Treatment: Dividing the Year You Leave

The UK tax year runs 6 April to 5 April. If you leave the UK mid-year, you do not automatically get relief for the overseas part of the year. You need split year treatment.

Split year treatment divides the tax year into a UK part and an overseas part. During the overseas part, you are only taxed on UK-source income (rental income, UK employment income, etc.), not your worldwide income.

There are eight cases for split year treatment. The most relevant for agency owners are:

Case 1: Starting full-time work overseas

You leave the UK to work full-time overseas. The overseas part starts on the day you begin full-time overseas work. You must meet the third automatic overseas test for the following tax year (or would meet it if you had a full year). This is the most common case for agency owners who relocate their business operations.

Case 3: Ceasing to have a UK home

You leave the UK and cease to have a UK home. The overseas part starts on the day after you no longer have a UK home. You must have an overseas home by that date and be non-UK resident for the following tax year. This case is relevant if you sell or let your UK property.

Important: split year treatment is automatic if you meet the conditions — you do not need to apply to HMRC. However, you should include the claim on your Self Assessment tax return for the year of departure and keep evidence that you met the conditions.

Worked Examples for Agency Owners

Example 1: Clean break to Dubai

Sarah — SEO agency owner, £300k revenue

✓ Moves to Dubai on 1 September 2026
✓ Sells UK home, family moves with her
✓ Works full-time from Dubai office
✓ Returns to UK for 10 days over Christmas
✓ UK ties remaining: 90-day tie (was in UK 180+ days in 2025/26)

Result: With only 1 tie and 10 UK days, Sarah is well within the "previously resident" threshold of 121 days. She passes the sufficient ties test as non-resident. She also qualifies for split year treatment under Case 1 (full-time overseas work), so only her UK-source income from April to August is taxed in the UK.

Example 2: Gradual transition with UK ties

James — digital marketing agency owner, £500k revenue

! Moves to Dubai but keeps UK flat (available year-round)
! Wife and children stay in UK (will join later)
! Returns to UK every 6 weeks for client meetings (approx 50 days)
! Works 5+ UK days per visit

Result: James has 4 ties: family (wife/children in UK), accommodation (UK flat available), work (25+ UK work days, would be 40+ if visits increase), and 90-day (lived in UK previously). With 4 ties and 50 UK days, he is UK resident because the threshold is just 16 days. He needs to restructure his approach — either move family, dispose of UK property, or drastically cut UK visits.

The Temporary Non-Residence Rule

This is the anti-avoidance rule that catches people who leave the UK briefly to realise gains or extract income tax-free. If you leave the UK and return within five complete tax years, certain income and gains from the non-resident period are taxed when you return.

The rule primarily affects:

Capital gains on assets you owned before departure (shares, property, business assets)
Dividend income from close companies (companies with five or fewer participators — most owner-managed agencies qualify)
Pension income taken during the non-resident period

If you stay abroad for five full tax years, the temporary non-residence rule does not apply. For agency owners making a genuine long-term move to Dubai, this is not usually a problem. But if you are thinking about a two-year stint and then returning, plan carefully.

Practical implication

If you are planning to extract large dividends from your agency while non-resident, check whether you will return to the UK within 5 years. If you will, those dividends could be taxed at UK rates when you return. This is one of the most common traps for agency owners who do not take proper advice.

Record Keeping: Protecting Yourself from HMRC

HMRC can investigate your residence status, and the burden of proof is on you. If you claim to be non-resident, you need to prove it. Keep the following records:

Flight bookings and boarding passes — evidence of every UK arrival and departure
Passport stamps — though UK e-gates do not always stamp, keep digital records
Calendar or day tracker — log every UK day in a spreadsheet, including purpose of visit
UAE tenancy agreement — proves you have an overseas home
UAE work evidence — employment contract, trade licence, EJARI registration, office lease
UK property status — tenancy agreement if let, sale completion statement if sold
Family location evidence — school enrolment for children, spouse's visa/employment overseas

Store these centrally (a cloud folder is fine). If HMRC opens an enquiry, having organised evidence ready can be the difference between a quick resolution and a multi-year investigation.

What Are the Most Common SRT Mistakes?

Keeping a UK property available

Even if you don't visit often, having a UK home available for 91+ days creates an accommodation tie. Rent it out, sell it, or make it genuinely unavailable.

Not counting "work days" properly

A 3-hour client lunch in London is a UK work day. Attending a UK conference for your agency is a work day. Many agency owners undercount.

Assuming "183 days" is the only rule

With 4 UK ties, you can be resident with as few as 16 UK days. The 183-day rule is just one part of the SRT.

Forgetting the 90-day tie

If you lived in the UK for years, you will have a 90-day tie for the first two tax years after departure. This is automatic — you cannot avoid it.

Not planning for split year treatment

If you leave mid-year without meeting the split year conditions, you could be taxed on your worldwide income for the entire tax year of departure.

Ignoring the temporary non-residence rule

Extracting large dividends while non-resident is pointless if you return within 5 years — they will be taxed when you come back.

Next Steps

The Statutory Residence Test is the foundation of any UK tax exit. Before you commit to a move date, do the following:

Map your UK ties — list which of the five ties you currently have and which you can eliminate before departure
Calculate your safe day limit — based on your remaining ties, work out the maximum UK days you can spend
Plan for split year treatment — ensure you meet the conditions for Case 1 or Case 3
Set up record keeping — start a day tracker spreadsheet from day one
Get professional advice — the SRT is technical, and mistakes are expensive. A specialist can review your specific situation

Frequently Asked Questions

How many days can I spend in the UK without being tax resident?

It depends on your UK ties. With zero ties and no previous UK residence, you can spend up to 182 days. With four ties and previous UK residence, just 16 days makes you resident. Most UK agency owners leaving for Dubai have 3–4 ties in year one, so aim for fewer than 46 UK days to be safe.

Does the SRT apply to everyone or just UK citizens?

The SRT applies to everyone regardless of nationality or visa status. Your citizenship does not determine UK tax residence — only the SRT criteria (days in the UK, ties, and automatic tests) matter. A non-British person living in the UK is subject to the same rules.

Do I need to file a P85 form when I leave the UK?

Yes. Form P85 ("Leaving the UK — getting your Income Tax right") should be submitted to HMRC when you leave the UK. It notifies HMRC of your departure and triggers the process for adjusting your tax code. You should file it before or soon after you leave.

Can I remain a UK company director while living overseas?

Yes, but be careful. If you attend UK board meetings, they count as UK work days (if over 3 hours). More than 40 UK work days creates a work tie. Consider holding board meetings overseas or by video call to avoid triggering ties.

What happens if I miscounted my UK days?

If HMRC finds you miscounted days or failed to account for a tie, they can reclassify you as UK resident and tax your worldwide income for that entire tax year. The burden of proof is on you — keep detailed records of every UK visit.

Does renting my UK property out remove the accommodation tie?

If you rent out your UK property on a lease of 12 months or more and you do not use it during the tax year, it should not count as available accommodation. Short-term lets (Airbnb) or leaving it empty but available still creates the tie.

What is the "only home" test and why does it matter?

The "only home" test is an automatic UK residence test. If your only home is in the UK for a period of 91+ consecutive days and you spend 30+ days in it during the tax year, you are automatically UK resident — regardless of how few total UK days you have. Secure overseas accommodation before selling or leaving your UK home.

Key Takeaways

1Three-stage test: The SRT has three stages: automatic overseas test, automatic UK test, and sufficient ties test — applied in order. If the first gives a definitive answer, you stop there.
2Day limits vary by ties: With 4 UK ties and previous UK residence, as few as 16 days in the UK makes you tax resident. With zero ties, you can spend up to 182 days.
3Five UK ties: Family, accommodation, work, 90-day, and country ties — each one tightens the day limit before you become resident. Most agency owners have 3–4 ties in their first year abroad.
4Midnight and deeming rules: A "UK day" is any day present at midnight. The deeming rule adds same-day visits beyond 30 to your count if you have 3+ ties.
5Split year treatment: Divides the departure year into UK and overseas parts. You must meet specific conditions (Case 1 or Case 3). It is automatic if conditions are met.
6Temporary non-residence: The anti-avoidance rule taxes certain gains and dividends if you return within 5 complete tax years. Plan accordingly.
7Record keeping is critical: Keep detailed records of every UK day, work activity, and property status. The burden of proof is on you if HMRC investigates.

✓Verified by Alto's chartered accountants. Rates current for 2026/27 tax year.

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Statutory ResidenceTest Explained

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