International and Offshore Residency Rules

As a consequence of the Statutory Residency Test (SRT) you can enjoy more certainty as regards your residency status for UK tax purposes. That
said, the rules still require careful thought and planning especially for those who believe that they are non-UK tax resident but continue to visit the UK.

For those relocating to the UK, it is key that UK tax advice is taken beforehand. This is because a great deal of the planning opportunities that are available cannot be implemented once you have become UK tax resident.

Under the SRT, an individual is treated as being a UK tax resident for the whole of the tax year even if they arrive or leave part way through. In many cases the ‘split year treatment’, as it is known, will apply to ensure that you are not subject to UK taxes for the period prior to or after having lived in the UK. In cases where the split year treatment does not apply, it is generally advisable for those
leaving the UK to do so just before the start of the new tax year. In contrast those arriving in the UK without the benefit of the split year treatment, should consider relocating to the UK just after the start of the tax year.

For internationally mobile employees who are awarded share options, the regulations have changed. Where options are exercised, they will be liable to UK tax to the extent that the employee has been working in the UK; the earnings will be time apportioned to periods pre and post arrival in the UK.

Similarly, employees who have already exercised options that still contain restrictions will be liable to a tax charge if the restrictions are lifted (or deemed to lift). Care and advice should be taken for such individuals, and Menzies would be delighted to offer tailored support.

Your #BrighterThinking next steps

“If you consider yourself non-UK resident for tax purposes, we would recommend you consider the Statutory Residence Test (SRT).

Your ties to the UK could bring you within the UK tax net, and careful consideration and planning is recommended. This needs to be kept under continuous review. In the event you are to leave the UK, or else come to the UK, speak to an advisor. For the internationally mobile, who have been awarded share options, give as much consideration to UK tax implications on vesting, exercise or sale.”

Craig Hughes – Private Client Partner

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Menzies Private Client Team


Personal tax planning can be complex. We would always recommend that you seek professional advice when undertaking a review to ensure all changes are processed and managed effectively. Please do speak with your Menzies contact who will be delighted to meet with you to discuss ideas, opportunities and the appropriate action.

To discuss your International and Offshore Residency Rules planning arrangements for the tax year ahead, contact Menzies Private Client Team below: