Spending additional, unexpected time in the UK as a non-resident can impact on a person’s tax residency position

As a result of the corona virus outbreak, many British nationals based in China have been repatriated as a precaution. Spending additional, unexpected time in the UK as a non-resident can impact on a person’s tax residency position as the number of UK days a person has is a major consideration under the Statutory Residency Test (SRT).

Corona Virus Repatriation – Affect on UK Tax Residency

Ordinarily, if a person spends more than 183 midnights in the UK, they are automatically deemed UK resident. However, in the event of exceptional circumstances, up to 60 midnights can be ignored in a single tax year, when counting midnights for UK residency purposes. Exceptional circumstances are considered to be local or national disasters or life threatening illness or injury, meaning it is not possible to leave the UK. There must also be intent to leave the UK once the exceptional circumstances have ceased. Although HMRC have not specifically commented on the whether the repatriation of British nationals will be determined as exceptional circumstances, it is our interpretation that this would be considered an allowable exceptional circumstance.

Up to 60 exceptional circumstances days are allowed in each tax year, regardless of the number of separate periods or types of exceptional circumstances encountered. Any days in excess of the 60 day limit will be counted as a UK day, regardless of whether the circumstances would otherwise qualify as exceptional.

It is important to note, that the 60 days of exceptional circumstances does not apply to all aspects of the SRT; a person can still be determined to be UK resident under other sections of the SRT by virtue of their activities throughout the tax year, including their ‘exceptional circumstances’ period. For example, failing to maintain an overseas home or failing to be present in their overseas home for more than 30 days; or meeting the criteria for full time work in the UK for the period, this is particularly significant for those who have commenced their overseas employment in the same tax year as the exceptional circumstances period, as it may affect their ability to split the tax year.

If you have been affected by repatriation to the UK as a result of the Corona virus outbreak, or have exceptional circumstances days for any reason and would like to discuss the potential impact on your UK residency position, please get in touch.