What is residence?
Your residence status is one of the factors that decides what UK tax you pay and on what types of income and gains.
Following the 2016 European Union (EU) membership referendum in the UK, on 29 March 2017 the UK provided notice to the European Council of its intention to withdraw from the EU under Article 50 of the Treaty on European Union. At the time of writing (in March 2019), the date and terms of the UK’s departure from the EU have not yet been finalised. Therefore, please note that the guidance below reflects the law as it applies before the UK’s departure from the EU.
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Prior to 6 April 2013, residence was a general term, with no legal definition. Generally, your residence was the country where you were living.
From 6 April 2013, there is a Statutory Residence Test (SRT) for the UK – this means that the rules of residence are set out in tax law. The position for many people is broadly the same as it was before the SRT was introduced.
Normally, you are tax resident (or not tax resident) in the UK for a complete tax year. A tax year runs from 6 April in one year and ends on 5 April in the following year – the tax year 2019/20 runs from 6 April 2019 to 5 April 2020. It is possible to be tax resident in both the UK and another country at the same time: this is called dual residence. You can be UK resident, even if you are not domiciled in the UK.
Residence is primarily determined by how much time you spend in the UK in a tax year or a series of tax years. The more time you spend in the UK, the more likely you are to be UK resident for tax purposes and subject to UK tax on your income and gains.
You can find the guidance for the SRT on GOV.UK.
For most international students who also work in the UK, you will be subject to UK tax on your earnings, whether or not you are resident in the UK.
If you only have UK income while you are here, whether or not you are tax resident, all of your UK income will be subject to UK tax.
Your residence status is also a factor in whether or not you are eligible for the UK personal allowance (though EEA citizens will be eligible for a personal allowance regardless of their residence status) and therefore the amount of UK tax that you pay.
If you are here for a short time and have income below the personal allowance, then you may have no tax to pay. Your entitlement to a personal allowance is therefore very important.
If you stay for a long time, then you probably will be resident in the UK, in which case you will get a personal allowance.
There are some circumstances in which you may lose your personal allowance. This means you may pay more tax. There is more information on this topic on our webpage How are foreign income and gains taxed?.