Non-UK Tax Residents - How Many Days Can You Spend in the UK?
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This is a follow up to a recent video • UK Crypto Taxes - Be C... explaining that you may need to become non-UK tax resident for 5 tax years in order to avoid UK tax on some transactions.
The most common question I received was "how many days can I spend back in the UK once I’ve left, without creating tax issues?" This video provides insights into what factors you must take into account and the potential number of days you can spend in the UK without becoming UK tax resident again.
0:00 Introduction
1:20 Statutory Residency Test (SRT) overview
2:30 Automatic Non-Resident Test
4:38 Automatic UK Resident Test
8:24 Sufficient Ties Test
11:23 Leavers & Arrivers
11:49 Days You Can Spend in the UK (Leavers)
13:18 Days You Can Spend in the UK (Arrivers)
14:14 Split Year Treatment
16:16 Conclusion
A BIT ABOUT ME
I've been advising on international tax since 2014, and qualified as a Chartered Accountant in 2018. I worked for consulting firms PricewaterhouseCoopers and BDO, before I started a remote international tax consultancy firm, Degen Tax Advisers, in 2020.
I work with online entrepreneurs to help them navigate the complex world of international tax. I work with e-commerce businesses, digital nomads, content creators, tech startups, crypto investors and many more in the digital space. Like my clients I'm pretty nomadic. I've lived in the UK, US, Japan, South Korea, China, Malaysia, Thailand, Vietnam and Singapore. Currently I'm spending most of my time around Southeast Asia.
DISCLAIMER
My videos are for general guidance, education and providing you an introduction to the concepts of international tax. They in no way constitute specific advice to your specific circumstances. I accept no liability for any reliance placed upon the content of these videos or references, therein.
Brilliant video Andy. You explained the rules which aren't really fully understood by many expats, in a clear and concise manner. I found it very useful. Thank you.
Good video, appreciate you putting this knowledge out there
Another excellent and informative video thanks mate. So well thought out and explained!
Very useful and well articulated. Thank you
Andy - great video - nice to see a fellow Scot explaining things in such a clear way. I'd like to add this video to the web site for my new Dubai based advisory company. So I wanted your permission. Not after any remuneration - just want to add it as a really helpful resource. It really hits the spot. I see you also offer courses etc... which again I'd be happy to link with - as well as adding a brief bio next to the video. In the UK I run a SSAS Administration business, but here in Dubai I'm in the 'tax' field - but do something different. I enable Expats to wrap up their UK property investments into a tax exempt GDEUT structure - removing IHT as well as Non-Resident Landlord taxes. Really happy to chat about this, so you know what we do and what we don't do! Because people put me in the 'tax' bucket - they think I want to discuss SRT (which is where you come in!)... I'm on the other side - once they are earning tax free wealth - how to protect it from HMRC wherever possible. (I have added a short explainer video to my SSAS channel so you can take a peep at this if you want).
Hi, thanks for the kind words and yes no problem at all, feel free to use and share any content you want. Also I've followed your channel and good to know what you do. UK property investment structuring is certainly way beyond my expertise, but I occasionally work with non-residents who may well benefit from your experience there.
I've never seen anyone in finance successfully explain that - great job Andy - you are a freakin legend.
Brilliant content Andy
Your channel is very informative. You explain things much better than many channels out there. My advice to get even more views is to do more videos on crypto/capital gain tax . People seek good info and they are hard to find
100%
Thanks for all the kind words, hugely appreciated and glad to be able to help. I made this channel last year because I found the overall TH-cam tax space to be a little 'salesman' focused; a lot of clickbait, limited substance and less informative than it could be - so happy that its providing some of the value I was hoping it to. I've had so many questions on crypto lately, the extend to which has surprised me , so I'll definitely provide more content in this area over the coming weeks & months
Great stuff. I seem to remember, last time I looked it up, that one of the ties is removed after being a non-resident for 3 years or more. I think, if I recall correctly, it was the country tie.
Hi, thanks for the kind words, and on the country tie, in effect yes that's correct.
Because the rules vary depending on whether you are considered an "arriver" (not UK resident in the three previous tax years) or "leaver" (UK resident in one or more of the three previous years). For arrivers, spending 46-90 days in the UK requires you to have 4 ties to be considered a UK resident, whereas leavers would be considered UK residents if they have 3 ties.
The application of the country tie is dependent on your residency status in the preceding three years - if you were not a UK resident for any of the three preceding years, the country tie wouldn't apply. I think in most cases the country tie usually wouldn't be relevant for arrivers anyway because I'd imagine it would be quite unusual for someone who's been non-resident for so long to have also spent more days in the UK than anywhere else. But certainly useful to know this for those fringe cases.
I have seen hedge funds like Capula Investments are UK LLPs and the hedge fund owners have their partnership involvement under as a LLC. They do all this while living in the UK and there is no way they are paying 50% tax so what do they do?
Can you advise how to calculate CGT after a crypto sale and how to make the payment
Great video. In order to avoid the split year residency would I need to leave the UK before the 6th April 2024 or does CGT only become applicable from the date at which it is realised i.e. if I left the UK in June and make a Capital Gain in July of the same year, is that gain still taxable in the UK under the split year residency.
Hi, thanks for the kind words. If you don't meet the statutory residency test (i.e you're not a UK resident) then you're non resident for the entire tax year (April 2024 to April 2025) so your capital gain in July wouldn't be subject to tax. Indeed, even a gain triggered on 6 April 2024 wouldn't be subject to UK tax (even if you're in the UK) so long as you're non resident for the year.
However, if you're resident for the year under the SRT, then split year comes into play and it will be split between the UK part (before you leave) and non uk part (after you leave). The gain in July would be non taxable in the UK so long as you were outside the UK.
Hi..great videos im curious about taking my profits in Portugal and thonking of getting a residency there..the reason is to raise euros to buy a property there is this really easy to do or complicated and restrict my visits back to the uk? Thanks
Hi, thanks for the kind words. It shouldn't be too complicated - in general what you'll need to do is (1) ensure you meet the requirements for Portuguese residency and (2) ensure you don't meet UK tax residency - which for most people means spend less than 90 days per year in the UK, but this varies depending on your ties to the UK. I made a more detailed video on this here. th-cam.com/video/ujPQafH6_TU/w-d-xo.html
Would be great to understand split year treatment in more depth as this applies to me - would be great if you did a video on this, do you have a contact email and do you work as an advisor for tax enquires?
Hi thanks for the suggestion, I've found from the comments that this is an important area to cover for a lot of people so I'll make a video shortly. Also feel free to contact me at advisers@degenwealth.com or via www.degenwealth.com
Hi Andy. I want to sell some crypto I bought in 2017. I got the crypto by selling virtual items in a video game in exchange for bitcoin. The problem is I don't have any formal documentation. Because I sold the items in a video game, there's no transaction history or receipts of any kind. I would like to realise some gains soon but I have no idea how to go about doing this. If i sell some BTC and a large sum of money suddenly appears in my bank account. Won't that raise alarm bells and potentially lead to the bank freezing the money? I'm happy to do a self assesment tax return and pay 20% capital gains tax. I'm just worried as I can't prove where I got the bitcoin from. I have some screenshots of people on discord sending me bitcoin in exchange for virtual items in the game. But I dont think that is enough and the government/banks might want more official documentation. Would appreciate any advice you have.
Very informative video Andy. May i ask in that table at 11.50, those days, are they consecutive days or cumulative in a tax year?
Thanks Garry - these are cumulative days. So you should always work out the total number of days spent in the UK in total between 6 April and 5th April of the following year.
Note that a UK day counts as a day in which you were present at midnight at the end of the day. So for example, if you arrived in the UK at 5pm on the 23rd of May, and you left the UK again on the 24th of May at 5pm, this would count as 1 UK day. This is because you were present at midnight of the end of the 23rd, meaning the 23rd counts as a UK day. However the 24th doesn't count as a UK day because by midnight you were somewhere else. So its worth keeping this in mind if you're travelling and trying to work out days spent
Thanks for taking your time to respond and help Andy, very nice gesture from you.
In my case, i feel i have been misinformed by my UK employer. I live and work in the UK but for family reasons i have to travel between EU and UK. Since I am almost coming to an end of 3months consecutive stay outside of UK, HR from my employer now raising it as a big issue and asking me to return immediately or resign citing that I will become a non-resident from UK perspective and they do not want to deal with double taxation etc.
Is there an official reference that i could send it to the HR to prove that its not CONSECUTIVE Days but CUMULATIVE. Thanks again.
@@gowthas Hi, no problem at all. So it definitely seems like you've been misinformed. I would refer them to the Finance Act which is the UK law definition of the statutory residency test.(SRT) www.legislation.gov.uk/ukpga/2013/29/schedule/45 within this you can see that they are referring to total days spent in the UK over the tax year, ie on a cumulative basis. There is no mention of consecutive days - the only thing that is relevant is a holistic view of your days spent in the UK over the year.
Also, because the SRT is complex and case-specific, the test is very personal - that is to say, your employer generally cannot determine whether you are a tax resident under the SRT, because it will often depend on ties to the UK which they may not be aware of. This is ultimately your own private matter and if you ensure you still qualify as a UK tax resident then they essentially have to take your word for that. If they query it, you can indeed provide the evidence for this, but its absolutely not something they should be concluding before consulting you.
That's awesome. Thanks a lot again 👍
Hi, am I correct in thinking you have a £6k free CGT allowance in the uk which is separate from your tax free income allowance?
If so could I cash out my full allowance of £6k on my CGT on my crypto or even my trading per year without paying any CGT?
This is a great video. Would you have to sell your residential property if you are moving abroad and you do not want to rent it out. I.e. siblings would live in the property as we the owners pay the mortgage.
Hi, thanks for the kind words. No, not necessarily, there are many cases where you can still have your residential property and be non-UK tax resident. Even if the accommodation is available to you, this in itself creates one tie, but your status will depend on how many other ties you meet. So you might still be in a position where you have a low number of ties overall meaning you remain outside UK tax residency. Note, the one rule you could be caught by is the automatic residence test which applies when your only home is in the UK. HMRC may try to claim this to be your home (even if your siblings live there meantime) so to protect against this you'd have to have somewhere abroad you could point to as a home in which you spend at least 30 days in the tax year in. Note, you don't need to own it, it could simply be a rental property, long term lease, or even an airbnb in which you rented out multiple times in the year.
What counts as a work tie test seems unclear. If you’re a digital nomad working more than 3 hours a day in the UK but your business is foreign based , clients are in a foreign country, and you get paid in a foreign account and the only aspect of the work in the UK is you’re physically sitting inside UK while doing that work does that count as a country tie ? If yes how can they prove you worked 3 hours a day or more when you can always claim you worked 2 hours and 59 minutes and no more each day?
Yep indeed its another good illustration of how outdated UK tax law is - this '3 hour rule' made much more sense a few decades ago when people didn't generally have online businesses. It would usually be quite clear on the hours they worked (e.g they perhaps had a fixed 9-5 contract with an employer, and spent time in the UK exercising duties), or perhaps they had to 'clock in' or submit timesheets etc which could all be used as evidence.
Whereas, nowadays online businesses are so subjective - for example, I may have a record of all the emails I've sent clients, but HMRC has no idea whether an email took me 30 seconds to write or 2 hours. All to say - they don't really have a great way to determine how many hours you actually worked in your situation. They will rely on the best available evidence (so if you do have some traced data like Calendly, Google Calender with call invites etc) they can try and deduce hours worked from that, but absent trails like that, there's nothing reliably to determine you worked more than 3 hours.
So to answer your initial question, yes technically speaking if you're physically located in the UK when you do the work (regardless of where your clients are or where you get paid) it can count as a UK workday, but HMRC's ability to detect this in a lot of online business cases is extremely weak
Hi, I wonder if you could help me. This tax year ending in April is a split tax year for me as I left the UK to work abroad half way through. How does it affect the number of days I can stay in the UK when I count the days I came back to stay with my family in the UK after I started working abroad. Is it still 90 days even though I started working abroad half way through the tax year or is it less? I think I have 2 ties, spouse and children under 18, and a home. Or do I have 3 ties (90 day tie) as I spent more than 90 days in the UK in the two previous tax year? Many thanks.
Hi, it is likely you’ll have 3 ties if your spouse & children are still living in the UK. However this isn’t a problem for split year treatment - you can qualify for this treatment with almost any number of days spent in the Uk, so long as you have moved residence to another country during the year. You could even go back to the Uk for a visit after leaving.
If you had only 2 ties & less than 90 days then you wouldn’t even need to worry about split year treatment. The entire year would be a non resident year thus you wouldn’t be subject to Uk income tax. Split year only comes into play when you are a tax resident according to the SRT
Thank you very much, you made it really easy to understand, very helpful.
Great content, very helpful. What are the rules if you decide to remain in the UK but relocate to one of the channel islands where I believe you are not required to pay capital gains but as a UK citizen can immediately become a resident?
Hi, thanks for the kind words. From the UK angle, the rules remain the same, that is you would still have to keep the 5 year rule in mind if you were to return from the Channel Islands. However from the Channel Islands perspective, this ensures you have no capital gains tax to pay when you're resident there. So it's always a great option, because some people don't realise that leaving the UK isn't the only consideration here - most countries will tax capital gains, meaning their new tax residency could become a problem depending on where they relocate to. But as there is no capital gains taxes on crypto, the Channel Islands is a good solution.
@@WorldTaxAndy excellent news, thanks for your reply.
So as a UK (Channel isnald) resident would there still be limitations on the amount of days I could spend on the UK mainland? I imagine you get a lot of questions on this subject and I massively appreciate you taking the time to offer advice. Thankyou again.
@@theflashpointuk no problem - to be conservative it would be good to limit the UK days to avoid being considered UK resident under the SRT. However, you would potentially be able to get more days in the UK if you meet the criteria for a Channel Islands tax residency. The UK has double tax treaties with Jersey & Guernsey, and even if you meet the UK SRT, you may still be able to claim that under the double tax treaty you are only taxable in the Channel Islands due to the residency tiebreaker rules in the treaties. This can get a bit complex and highly dependent on personal circumstances though.
@@WorldTaxAndy thanks for the advice, I definitely have a clearer idea for what I need to do going forward.
If you live in the Channel Islands full time then you don't live in the UK: the Crown Dependencies and British Overseas Territories are NOT part of the UK, as opposed to e.g. Northern Ireland or the Isle of Wight.
Brilliant work, you should be getting paid from viewers to get this hard work done for them 😂
Are liable for capital gain tax for all the years you had in crypto or just the last tax year? Thanks
Capital gains tax generally only applies in the year(s) that you sell the asset. So lets say you cash out Bitcoin today for a profit, which you previously purchased in 2017. You would only be liable for capital gains tax in the 23/24 tax year (assuming you were UK tax resident).
Really useful content - If I leave the UK on 6th April and go abroad to set up my own company but it takes a while to get opened and then able to employ me… will the 35 days spent abroad working on getting it set up and my employment contract dated mean I have had a ‘break’ from my employment of more than the 30 days - so would fail my non-resident employment test? I flew to Turkey - spent a month making contacts, lining up potential clients and designing the web site… then flew to Dubai and took a while getting VISA and my formal employment contract up and running as the employer company did not exist until I formed it… so my ‘job’ began 16th May….. do not want to have only 16 days in the UK, so am keen to pass the employment test… fingers crossed this end!
Hi Paul, generally this wouldn't be considered a break if you were actually working. Thankfully the SRT does not require you to have a formal contract in place for a day to be considered a work day. As long as you have some sort of justification that you spent 3 hours or more on work related activities - this could be your visa setup, lining up contracts, client meetings, research, marketing etc - then these still count as work days, so if you did this for the 35 days abroad, you wouldn't have to worry about the 'break' in work.
Thank you - I can stop worrying then! Phew….
Im getting ready to make a bunch of money from Crypto and dipping from the UK. Ill be sure to contact you as soon as im on my one way ticket to Puerto Rico.
One thing you missed that I have seen is: "There is no significant break from your overseas work - A significant break is when at least 31 days go by and not one of those days is a day where you work for more than 3 hours overseas" This is the third bullet point in "2.3 Third Automatic overseas test". Lets say you start the tax year in the UK on April 6th. Do you need to get out of the uk before May 5th to avoid falling into this trap, even just for a few days?
Thanks for pointing out and indeed an important consideration if you are hoping to qualify under the automatic overseas tests. Ideally yes you would need to leave before May 5th to guarantee you can qualify for this test. However, you may still be able to qualify under the other tests e.g the sufficient ties tests. And failing that, you also may still be able to get split year treatment. So there's still plenty of options if you can't leave until after May.
Hi Andy. I have messaged you before but was unsure what direction I was going in life.
I have 3 Ltd companies and one rental account in the uk. I am currently traveling full time and believe I could be non resi of the uk.
If I book a call can you assist me to be more tax efficient and give guidance to me and my Uk accountant on my tax position. Naturally don’t expect this within the one call..
Hopefully look forward to talking to you.
Wanted to ask as I didn’t want to waste your time.
Many thanks
Wayne
Hi Wayne, thanks for reaching out and yes happy to help out with this - by the sounds of it with your full time travel it's highly likely you're non UK resident so that's a great starting point for tax efficient but happy to dive into more detail over a call.
Can you do a video if it’s beneficial to set an LLC IN THE UK EVEN IF IM A US CITIZEN. & if it’s even worth it or not
Hi, thanks for the recommendation, yes this is an important topic so will certainly cover this soon.
Interesting. Who would know this info in relation to Canada?
Thanks - thankfully the Canada rules are more simple than the UK's (as are most countries!) here's an overview www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/determining-your-residency-status.html
I work with a Canadian tax team so I will make some content in relation to Canada shortly.
@@WorldTaxAndy Agreed the Canadian rules appear to be simpler, but they are vague and open to interpretation. At least the UK rules are definitive.
W
What f you moved to a EU Country on a Visa retirement programme with a dual tax treaty, my understanding as long as u spend more than 6 months in foreign Country u are not subject to UK Tax?
Hi Martin, that's generally the case if you are a tax resident of another country which has a double tax treaty with the UK. In most cases, becoming a tax resident will mean spending 6 months in that country. This applies to most EU countries. In which case the double tax treaty will protect you from tax in most cases, however the UK can still charge UK tax on UK rental properties.
Great video but the rules are completely insane, not to mention in my city we have countless illegal immigrants arriving by boats without any details, being put up for free in 5 star hotels with food..................... Everyone else paying their way and trying to live properly needs to pay up regardless of what living they earn....
1. If you are a British National moving abroad, then who in the world would visit UK for less than 16 days??? so the first rule I doubt unless they left the country permanently and had no loved ones there, maybe nobody has ever passed number 1.
2. How in the world could you even be considered a tax payer having been a non-resident for last 3 years already oO Good God the UK gov are criminal.....
3. If you work abroad or remotely, then it shouldn't even be considered as working in UK at all, but since it is.... and you stay for less than 91 days, you'd literally have to leave your job to visit your mother OR pay 12 months the full tax years worth to the rich corrupt money grabbers again. How can anyone prove you've been working remotely when visiting UK anyway??? when you're there visiting family?
So basically these tests are mostly impossible to escape giving half of your hard earnt salary that you've been paying the government stupid amounts of money to get through college and Uni for already...
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In my situation, I visited my mother for more than 16 days, but otherwise not been in the country. Because I work remotely, I didn't know that counts as "work in UK" and therefore those 16 days cost me an entire years salary........ half my hard earnt money gone into thin air... or rather to the rich gov, despite i don't live in UK anymore, I was there for under a month. CRIMINALS!