Covid-19 and UK residence

HMRC has released guidance confirming that where a person is unavoidably detained in the UK due to the Covid-19 pandemic, this may be treated as exceptional circumstances for the purposes of the statutory residence test (SRT) and as such their presence in the UK may be temporarily disregarded.

Under the SRT, which has been in place since 2013, an individual is resident in the UK in a tax year if either the statutory automatic UK residence test or the sufficient ties test are met and the individual does not satisfy any of the automatic overseas tests. These test depend in many cases on the length of time an individual spends in the UK or elsewhere.

However, days spent in the UK may be ignored if the individual’s presence in the UK is due to exceptional circumstances beyond their control (FA 2013 Sch 45 para 22). This will usually only apply to events that occur while an individual is in the UK and which prevent them from leaving the UK. Exceptional circumstances will normally apply where the individual has no choice concerning the time they spend in the UK, or in coming back to the UK. The situation must be beyond the individual’s control.

HMRC have now issued an update to their Residence, Domicile and Remittance Basis Manual (at RDRM11005) to confirm that the outbreak of the coronavirus pandemic may be treated as giving rise to exceptional circumstances for these purposes where it impacts on a person’s ability to move freely to and from the UK. The update makes it clear that whether the exceptional circumstances relaxation applies will depend on the individual’s particular circumstances, but if 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;
• finds themselves advised by official Government advice not to travel
  from the UK as a result of the virus;
• is unable to leave the UK as a result of the closure of international
  borders; or
• is asked by their employer to return to the UK temporarily as a
  result of the virus the circumstances are considered as exceptional.

It is important to note, however, that there is a 60 day cap for days disregarded through exceptional circumstances. This means that if a person is unavoidably detained in the UK for 100 days, the first 60 are disregarded, but the remaining 40 are counted as days spent in the UK.

See our Coronavirus (COVID-19) feature for more information generally on the possible legal implications of COVID-19.