What is Statutory Residency Test?

How it works

A statutory residency test replaces "facts and circumstances" judgment with mechanical rules. Instead of an authority weighing intent and ties subjectively, the test combines specified inputs (day counts, ties, prior-year status) into deterministic outcomes. Modern statutory tests have three benefits:

• Predictability — taxpayers can compute residency without waiting for an authority's decision.
• Reduced disputes — fewer subjective elements to litigate.
• Cross-border planning — you can model future residency changes precisely.

UK Statutory Residence Test (Finance Act 2013, Schedule 45)

A three-part cascade:

1. Automatic overseas tests — pass any one and you're non-UK resident regardless of UK ties:

   • In UK fewer than 16 days this tax year (if UK-resident in 1+ of the prior 3 years), or
   • In UK fewer than 46 days this tax year (if not UK-resident in any of the prior 3 years), or
   • Full-time work overseas with limited UK days.

2. Automatic UK tests — pass any one and you're UK resident regardless of overseas ties:

   • 183+ days in UK in the tax year, or
   • Only home is in the UK, or
   • Full-time work in the UK.

3. Sufficient ties test — applied if neither auto-test resolves. Counts UK ties:

   • Family tie (spouse / minor child UK-resident)
   • Accommodation tie (UK home available + used)
   • Work tie (40+ UK workdays)
   • 90-day tie (90+ UK days in either of prior 2 tax years)
   • Country tie (more UK days than any other country) — only for "leavers"

   Day-count thresholds for residency depend on number of ties — more ties means fewer days needed to be UK resident.

US Substantial Presence Test (IRC §7701(b))

A weighted three-year formula (per PwC US individual residence):

• 31+ days in the current year, and
• 183+ weighted days = current year + (prior year × 1/3) + (year before that × 1/6).

Plus exemptions for F/J/M/Q students and teachers, foreign-government employees, medical conditions, Canadian/Mexican commuters.

Other notable statutory tests

• UAE (Cabinet Decision 85 of 2022): 183 days in any 12 months, OR 90 days for nationals/permit holders with permanent residence or local employment, OR primary residence + financial/personal interests centre.
• Georgia: 183 days in any continuous 12-month period (per PwC GE).
• Australia: domicile test, 183-day test, superannuation test (any one triggers), plus the residence-by-ordinary-concepts test.

Examples

• British executive on 2-year US assignment. UK SRT: leaves UK with 250 UK days in year of departure; following year 30 UK days. Year 1: still UK-resident under automatic UK test (183+). Year 2: tests for non-resident under automatic overseas test (under 46 days, no UK residence prior 3 years). Cleanly switches.
• French founder relocates to UAE. UAE: 220 days, plus residence permit + UAE rental + UAE bank accounts. UAE tax-resident under any of three Cabinet Decision 85 limbs. Separately, France must be checked under article 4B CGI — possibly remaining French-resident if family / foyer in France.

Common mistakes

• Treating statutory tests as the whole story. France, Spain, Germany, Italy still use non-statutory centre-of-life / foyer / vital-interests tests in domestic law that can override day counts. A clean SRT exit doesn't free you from French residency if French law's article 4B catches you.
• Forgetting the look-back. UK SRT counts prior 4 / 7 years. US SPT counts prior 2 years. A "this-year" snapshot doesn't capture the test.
• Mis-counting days under each country's specific rule. UK midnight rule, US partial-day rule, Switzerland 24-hour rule — each different. See day counting rules.
• Underestimating UK ties. A spouse remaining in the UK + an available UK home + 90+ days in either prior year can create UK residency at very low day counts (under 90 days).