Last spring, lockdowns were coming into effect across the globe. Flights were cancelled and travel stopped. For some people, this provided another complication to deal with: unexpected UK residency.

Exceptional circumstances

Under the statutory residence test, individuals can spend up to 60 days extra in the UK due to exceptional circumstances. Such 'exceptional circumstances' are assessed on the specific facts and circumstances of each case. Instances which may be considered exceptional can include medical emergencies which prevent that person from leaving the UK and are beyond their control.

It should be noted however that this applies only to the basic day-count for the statutory residence test. It does not apply to the UK workday count. Even if the exceptional circumstances rule applies, a taxpayer could still become UK resident either under an automatic UK residence test or by acquiring additional UK ties. This is of particular concern for persons who usually live and work abroad but who found themselves unable to return home during the lockdown. These people may no longer satisfy the automatic overseas residence test and will need to assess whether they have become UK resident in the tax year 2020/21.

In relation to the current pandemic, HMRC has confirmed that the following circumstances are considered as exceptional:

  • A person is quarantined or advised by a health professional or public health guidance to self-isolate in the UK as a result of the virus;
  • A person is advised by official Government advice not to travel from the UK as a result of the virus;
  • A person is unable to leave the UK as a result of the closure of international borders; or
  • A person is asked by his or her employer to return to the UK temporarily as a result of the virus.

HMRC have confirmed that an individual who was unable to leave the UK due to the pandemic, will not have to pay UK tax on employment income that he or she:

earned between the dates he/she intended to leave and when he/she actually left; and
pays tax on in their home country.

Practical implications

In uncertain times, it is recommended to keep an accurate record of day count in the UK. If you suspect you may have become UK resident, we can help advise on the impact of your UK residency on your overseas earnings and remittance basis status, including whether you have become deemed UK domiciled due to accumulated years of residency. We can also consider the effect on any trusts where you are a settlor or beneficiary or any companies in which you are a shareholder or director. If you have decided to remain in the UK during the pandemic, it is advisable to keep the position under review as guidance could change at short notice.

What to do now?

Seek advice – we're happy to help! If you were stuck in the UK due to the pandemic, it is advisable to seek advice on your UK residency status. If necessary, a tax advisor can assist in filing a Self Assessment tax return. We recommend starting this process well in advance of the filing deadlines on 31 October 2021 (for submission by post) and 31 January 2022 (for online submission).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.