Could your property make you UK tax resident?

With the abolition of domicile for UK tax purposes from 6 April 2025, an individual’s UK tax position is now more dependent than ever on their residence status. That means the statutory residence test (SRT), and in particular, the UK home test, is likely to face greater scrutiny.

For internationally mobile individuals, understanding the SRT is crucial. One area that can catch people by surprise is the UK home test. Even where an individual spends relatively few days in the UK, the availability and use of a UK home can sometimes result in UK tax residence.

Why does UK residence matter?

A UK tax resident is generally subject to UK tax on their worldwide income and gains. In contrast, a non-UK resident is only subject to UK tax on certain UK-source income and specific UK property-related gains.

As a result, inadvertently becoming UK resident can have significant tax consequences.

What is the UK home test?

If an individual does not meet one of the automatic overseas tests and has spent fewer than 183 days in the UK, they may need to consider the UK home test.

The test is met if:

• The individual has a home in the UK for all or part of the tax year, and
  • It is available for at least 91 consecutive days, of which at least 30 days fall in the tax year, and they are present in it for at least 30 days in the tax year, and
  • They have no overseas home during the 91 day period, or they are present in the overseas home for fewer than 30 days in the tax year

At first glance these rules appear straightforward. However, people often focus on day count and overlook the availability and use of a UK home. A change in living arrangements or property ownership can therefore unexpectedly trigger UK residence.

Example 1: Not meeting the home test

Consider a retired Dutch national who owns a property in both the UK and the Netherlands.

He spends approximately 100 days each year in the UK and his UK property is available to him throughout the year. During the remainder of the year, he lives in his Dutch home.

Although he spends more than 30 days in the UK property and it is available for more than 91 consecutive days, he also spends more than 30 days in an overseas home which remains available to him. As a result, the UK home test is not satisfied.

This demonstrates an important point: having and using an overseas home allows an individual to have a UK home without causing UK residence.  However, care must be taken if an overseas home starts or ceases to be used in the tax year.  Other parts of the SRT would need to be considered to determine the individual’s residence status.

Example 2: Meeting the home test (where the automatic overseas test is not applicable)

Now imagine the same individual sells his Dutch property (his only overseas home) on 1 March and buys a new Dutch home at the end of June, staying in hotels in the interim when in the Netherlands.  Throughout that time, he has a UK home which he is uses at least 30 days in each tax year straddling the period when he did not have an overseas home. He uses his new Dutch home more than 30 days in the tax year.  Even though he has a Dutch home in both tax years and is present in each of those homes for at least 30 days, there is a period of more than 91 consecutive days when he does not have an overseas home but did have a UK home where he spent at least 30 days in each tax year.

This scenario means the home test is met causing him to become UK resident for both tax years.

The consequence is that the individual becomes taxable on worldwide income and gains, subject to any available reliefs, treaty provisions and foreign tax credits.

Common areas of uncertainty

The UK home test is often more complex than it first appears. Common questions include:

• What qualifies as a “home” for SRT purposes?
• When does a property become available to an individual?
• When does ownership or occupation cease?
• What counts as a day/presence spent in a property?
• How do temporary absences affect the position?

The answers are not always clear-cut and frequently depend on the facts of each case.

Thinking of making a move?

For anyone moving to or from the UK, or maintaining homes in more than one country, the UK home test should not be overlooked.

A change that appears relatively minor, such as selling an overseas property, allowing a UK property to become available, or altering living arrangements, may have a significant impact on your residence status and tax obligations.

With the post-April 2025 residence-based tax regime now in effect, reviewing your position before making major lifestyle or property decisions is more important than ever.

If a UK residence status is accidentally triggered, it can cause wider tax implications.  These may include the individual’s potential access to the foreign income and gains (FIG) claim, the temporary non-residence provisions and an individual’s inheritance tax exposure.

This article provides a general overview only. The SRT is fact-specific and advice should be taken based on individual circumstances.

Co-authored

Sarah Brown

Lewis Moyle