United Kingdom

From the 6 April 2013 UK tax residence will be determined by the Statutory Residence Test, which can be found at Schedule 45 to the Finance Act 2013 and determines who is resident and who is not resident in the UK for tax purposes. This is achieved by applying some fact based tests that take account of time spent in the UK, whether an individual has their only home in the UK, whether they work full time in the UK and their connections to the UK.

In general, individuals that spend more than half of the year in the UK are likely to be UK tax residents. HMRC has published guidance on the Statutory Residence Test in the Residence, Domicile and Remittance Basis Manual RDRM11000 onwards.

Anyone with more complex affairs should also refer to the residence pages of the Gov.uk website or consult their Tax Advisor.

In most circumstances, an entity will be tax resident in the UK where it is incorporated or managed and controlled in the UK.

If the entity is managed and controlled in the UK, but incorporated elsewhere (or vice versa) then the residence of the entity may be determined by treaty, or the entity may be ‘dual resident’, a tax resident of more than one country or jurisdictions.

For the purposes of reporting under the terms of the Common Reporting Standard a reportable entity also includes entities that are typically tax transparent (partnerships etc). For reporting purposes, an entity will be held to be ‘tax resident’ there even if the law of that country or jurisdiction does not treat the entity as a taxable person, e.g. a partnership managed and controlled in the UK will be ‘tax resident’ in the UK even though the taxable persons are the partners rather than the partnership itself.