Leaving the UK - breaking tax residence

Automatic overseas test

You are considered non-resident for a tax year if you are in the UK for fewer than a specified number of days during that year. Each day is counted based on your presence in the UK at midnight. The limits are as follows:

1. If you were resident in the UK for one or more of the preceding three tax years the limit is 15 days 
2. If you were resident in the UK for none of the preceding three tax years the limit is 45 days
3. If you work abroad ‘full-time’ (about 35 hours per week) throughout the tax year, without a significant break  of more than 30 days, with exceptions for annual, sick or parenting leave, the limit is 90 days. In this case you must also have fewer than 31 days in the tax year on which you do more than three hours’ work in the UK.

Days of presence will be disregarded where you spend a day in the UK due to circumstances beyond your control or where it is a day spent in transit. A Court of Appeal decision in favour of the taxpayer concerning what constitutes ‘exceptional circumstances’ has made this rule broader but also less certain when it can be applied.

If none of the three tests above are met, the automatic resident tests must be considered.

Automatic resident test

You will be conclusively regarded as resident in the UK in a tax year if:

1. You are present in the UK for 183 days or more in that year
2. You have a home in the UK for 91 consecutive days or more (where at least 30 days of that period fall within the tax year in question), and are present there for some time on at least 30 days in the tax year, and during that 91 day period either have no home overseas, or have one or more such homes but are present for fewer than 30 days at each of those homes in the tax year
3. You work full-time in the UK for a period of at least 365 days, all or part of which falls within the year, without a significant break. More than three quarters of the days in the 365-day period when you work for more than three hours must be days where you work in the UK.

If none of the automatic resident tests are satisfied, the sufficient ties test must then be considered.

Sufficient ties test

If you want to spend more than 15 or 45 days a year in the UK and do not want to work full-time abroad, it is still possible to be non-UK resident. However, you will need to substantially reduce both the amount of time you spend in the UK and the number of ‘ties’ you have with the UK.

The sufficient ties test combines the concept of UK ties with the number of days that you are present in the UK and can only be considered if none of the automatic residence tests are met. There are many situational complexities to each of the five UK ties but, in outline, the ties are:

Family tie

You have a spouse, civil partner, unmarried partner or minor child resident in the UK. If you have both a spouse and a child then this is still just one tie, not two. Children will not be taken into account if you see the child in the UK on fewer than 61 days in the year, or if the child is only resident because they are in full-time education in the UK and they spend less than 21 days in the UK outside term time.

Accommodation tie

You have accommodation in the UK that is available to be used for a continuous period of at least 91 days in a tax year, and you spend at least one night there in the year. If the accommodation is the home of a close relative the ‘one night’ test is extended to 16 nights. This tie does not require you to own the accommodation, so holiday homes and even hotels may trigger this tie.

Work tie

You work in the UK for 40 or more days in a tax year, for at least three hours per day.

90-day tie

You have been present in the UK for more than 90 days in either of the previous two tax years.

Country tie

You are present in the UK at midnight in the tax year at least as much as you are present in any other single country. This tie applies to ‘leavers’ only (see below).

The more ties you have, the less time you can spend in the UK if you want to be regarded as non-resident. Please note that the table below only applies when the individual is a ‘leaver’ meaning an individual who was UK resident in one or more of the three previous tax years. Separate rules apply to individuals who have not recently been resident in the UK aka ‘arrivers’.

Split year treatment

Residence status is generally determined for a complete tax year. However, if your circumstances fit one of the cases for split-year treatment to apply then the tax year of departure can be split into a resident period and a non-resident period. These rules are more complex, so make sure to get expert advice based on your personal circumstances.

Temporary Non-Residence Anti-avoidance rules

The Temporary Non-Residence (TNR) anti-avoidance provisions apply to prevent individuals leaving the UK for a short period to realise substantial amounts of income or capital gains. You must be non-resident for a specified period, otherwise you will be taxed on certain types of income and capital gains in the year you return to the UK. 

The TNR rules apply if the taxpayer has been UK-resident in at least four of the seven years prior to the date of departure from the UK and becomes UK-resident again within five years of that date.

Capital gains arising during the period of TNR are caught by the legislation. Subject to certain exceptions, the legislation covers all gains on UK or overseas assets held at the date of departure that are realised during the period of TNR, including attributed gains under TCGA 1992, s.3 (formerly s.13).

Receipts subject to income tax that are caught by the TNR rules include certain pension-related lump sum payments, chargeable event gains on life assurance policies arising on encashment of life policies except where the encashment is caused by the death of the life assured, offshore income gains realised during the TNR period and taxable as income under the non-reporting fund rules, and payments from close companies to “material participators”. 

The scope of the income tax rules was widened in the 2025 Budget so that from 6 April 2026 onwards all distributions or dividends received from a close company while an individual is temporarily non-UK resident will potentially be taxable if they return to the UK within their TNR period. Prior to this date, distributions from a close company were not taxed if they came from profits arising in the company after the individual left the UK. This is in effect retrospective as it will apply to individuals who left the UK before April 2026. 

If you have already left the UK and continue to spend time in the UK while non-resident make sure to get expert advice based on your personal circumstances to ensure that you do not accidentally become UK resident again. We would be happy to assist you, please contact one of the authors.