Point to watch out for with the connection factors for the statutory residence test

The statutory residence test applies a number of connection factors to assess an individuals residence status. Broadly speaking the more connecting factors present, the less time the individual can spend in the UK before they are classed as UK resident (and then subject to UK tax on thrir worldwide income and gains). Watch Out You need to be aware that if an individual spends more than 90 days in the UK in a tax year, this will in itself be a connection factor for the following two tax years. This adds an extra factor to the number of connection factors the individual already had, possibly taking him or her over a threshold and making them UK resident. Example Jack is a new Arriver in 2013/14. He has a UK resident wife and also accommodation in the UK (ie 2 connection factors). He spends 95 days in the UK in 2013/14 and 45 days in the UK in 2014/15. He will not be resident in those tax years if he does not work in the UK. If Jack then spends 95 days in the UK in 2015/16, he will become UK resident since he will then have 3 connection factors (family, accommodation and more than 90 days spent in the UK in one of the previous two tax years). In 2016/17 Jack will no longer be an Arriver, because he was resident in 2015/16. This means he now has to apply the more stringent tests for Leavers. As a Leaver with 3 connection factors he will not be able to spend more than 44 days in the UK if he wishes to lose his UK residence. This example about Jack demonstrates that individuals who wish to remain non-UK resident should still spend fewer than 90 days per tax year in the UK, unless they can reduce their other connection factors to a number that will preserve their non resident status. Provided, however, their position about connection factors is clearly satisfactory, a significant advantage of the proposed SRT is that a non resident should be able to rely on 'day counting' up to 90 days with far greater certainty than was possible under the old law and practice. In the example Jacks wife was assumed to be UK resident. However, the outcome of the SRT would be less certain if he and his wife arrived together and became resident (or not) at the same time. This is because the residence status of a husband may depend on his wife's residence status, and vice versa.