Internationally mobile employees and individuals that spend large chunks of time travelling have long argued that the current UK rules for determining tax residency are overly complex and inconsistent. In response, the Government has released plans to develop a SRT that we expect to take effect from 6 April 2012.  

The SRT will comprise a self assessed three part test; Part A (conclusive non resident); Part B (conclusive resident); and Part C (different sets of so called “connection tests” apply for those arriving in the UK and those leaving the UK which apply when A & B are inconclusive). Individuals who are borderline tax resident must carefully review the rules to ascertain what their likely tax position will be going forward.  

The tests will require individuals to implement and maintain record keeping systems that will enable them to demonstrate how long they were in the UK for and what they were doing while here. Employers who have UK resident employees whom they have transferred outside the UK will need to take care that they do not (unwittingly) make those individuals UK resident by asking them to return to the UK for work related reasons for periods extending beyond 10 working days in a tax year (the threshold applying to individuals who have been resident in the UK in any of the three previous tax years).  

The tests are summarised in the flowchart which can be found at

and more information can be found in the Herbert Smith briefing which can be found at

The consultation document setting out the Government’s proposals can be found at