Get your residence or domicile position wrong and the cost is rarely small: a missed split-year claim can leave a whole year of foreign income inside UK tax, and crossing the 10-year residence line quietly pulls your worldwide estate into UK inheritance tax. Two separate concepts decide all of this, and they no longer work the way most older commentary assumes.

UK tax residence and UK domicile are two distinct legal concepts. From 6 April 2025, UK tax residence drives income tax and CGT under the Statutory Residence Test at FA 2013 Schedule 45, and substantially drives IHT via the Long-Term Resident test at IHTA 1984 ss.6A-6C. UK domicile no longer drives income tax or CGT and only residually operates for IHT trust mechanics, private international law, and certain double taxation agreements. For what the remittance basis was and what replaced it on 6 April 2025, see the remittance basis page.

Why residence (not domicile) now drives almost everything

The pre-6-April-2025 framework gave domicile a privileged role: if you were UK-resident but foreign-domiciled you could claim the remittance basis on foreign income and gains, and the deemed-dom 15-of-20 test brought worldwide IHT exposure with a generous lag. From 6 April 2025 that architecture was rewired:

  • Income tax and CGT. The remittance basis was abolished by FA 2025 s.40 and Schedule 9. If you are UK-resident you are taxed on a worldwide arising basis, subject only to the new 4-year FIG exemption for qualifying new arrivals.
  • IHT. The historic deemed-dom architecture was replaced by the residence-based LTR test under IHTA 1984 ss.6A-6C. Worldwide-IHT exposure now depends on your UK-residence pattern, not your domicile.
  • Trust attribution. IHTA 1984 s.48ZA (inserted by FA 2025) gives a residence-based treatment of excluded-property trusts. The settlor's residence status at the date of trust creation drives the treatment, not domicile.

Residence is now the master concept. Domicile keeps a residual role but no longer drives your mainstream UK tax position. If anything you read still treats "non-dom status" as a live UK tax advantage in its own right, that framing is out of date.

The Statutory Residence Test in three stages

FA 2013 Sch 45 establishes a three-stage cascade. You work through the stages in order, and the first stage that gives a clear result fixes your residence for that tax year.

Stage 1: automatic non-residence tests

Meet any one of the three automatic non-residence tests and you are automatically non-resident for the tax year:

  • Test 1 (the leaver test): fewer than 16 days in the UK in the tax year, AND you were UK-resident in any of the three preceding tax years.
  • Test 2 (the non-leaver test): fewer than 46 days in the UK in the tax year, AND you were NOT UK-resident in any of the three preceding tax years.
  • Test 3 (the full-time-work-abroad test): full-time work overseas with limited UK presence and limited UK workdays, as defined in detail at Sch 45 para 14.

If you meet none of these, the cascade moves to Stage 2.

Stage 2: automatic UK residence tests

Meet any one of the three automatic UK residence tests and you are automatically UK-resident:

  • Test 1: 183 or more days in the UK in the tax year. The simplest and most-common positive case.
  • Test 2 (the UK home test): your only home is in the UK, OR all your homes are UK-based and you are present in a UK home for 91 or more days in the year.
  • Test 3: full-time work in the UK over a 365-day period that straddles the tax year, subject to the detailed definition.

If neither automatic test gives a result, the cascade moves to Stage 3.

Stage 3: sufficient ties test

The ties test combines your day-count with the number of UK ties you hold. Four ties apply to arrivers (not UK-resident in any of the three preceding tax years):

  • Family tie: spouse, civil partner, or minor child resident in the UK.
  • Accommodation tie: available UK accommodation used for at least one night in the year.
  • Work tie: 40 or more days worked in the UK in the year (3 hours' work in a UK day counts as a workday).
  • 90-day tie: 90 or more days in the UK in either of the two preceding tax years.

Leavers (UK-resident in any of the three preceding tax years) also pick up a fifth tie:

  • Country tie: more days in the UK than in any other single country.

The day-count matrix (Sch 45 para 18 for arrivers; para 19 for leavers) sets the ties threshold for residence. For arrivers: 16 to 45 days requires all 4 ties; 46 to 90 days requires 3 ties; 91 to 120 days requires 2 ties; 121 to 182 days requires 1 tie. For leavers the matrix is harsher (residence triggers at lower day-counts).

Split-year treatment in eight cases

SRT decides residence for the year as a whole. Split-year treatment under Sch 45 Part 3 lets you split the year into a UK-resident part and a non-resident part where one of eight Cases is met. Each case has detailed conditions; in outline they are:

  • Case 1: starting full-time work overseas during the year.
  • Case 2: partner of someone starting full-time work overseas, joining them partway through the year.
  • Case 3: ceasing to have a UK home during the year.
  • Case 4: starting to have a UK home only, after a period without one.
  • Case 5: starting full-time work in the UK during the year.
  • Case 6: ceasing full-time work overseas during the year.
  • Case 7: partner of someone ceasing full-time work overseas, joining them in the UK.
  • Case 8: starting to have a UK home, in advance of becoming UK-resident under SRT.

Split-year treatment is not automatic. You have to claim the case on your Self Assessment return for the year, and the payoff is real whether you are arriving or leaving: income and gains in the non-resident part of the year sit outside UK tax (subject to UK-source exceptions, the NRL scheme and NRCGT).

The new LTR test for IHT

If your estate is sizeable, the IHT reform is the FA 2025 change that matters most to you. The historic deemed-dom 15-of-20 test has been retired. In its place sits the Long-Term Resident (LTR) test under IHTA 1984 ss.6A-6C.

  • s.6A standard rule: you are long-term UK resident, and so within UK IHT on worldwide-situs assets, if you have been UK-resident (under SRT) for at least 10 of the preceding 20 tax years.
  • s.6B young-person variation: a modified test if you are under 20, reflecting the shorter possible residence history.
  • s.6C departure tail: once you have become LTR you keep LTR status for a tail period after you cease UK residence, and the longer your past residence, the longer that tail runs.

The shift is from a domicile-based test (where a domicile of choice was hard to acquire and even harder to shed) to a residence-based test that counts mechanically against the SRT. That cuts both ways. Arrive with no UK domicile of origin and reach 10 UK-resident years and your worldwide estate is in the IHT net. Hold a UK domicile of origin but spend most of the preceding 20 years abroad and you fall outside the LTR test, and outside worldwide IHT exposure.

Temporary non-residence anti-avoidance

TCGA 1992 s.10A is the long-standing anti-avoidance against short-term emigration to crystallise foreign gains. It applies where you leave the UK and then come back within a defined "temporary period of non-residence" (broadly up to 5 years for most fact patterns). Gains you realise during that non-resident period on assets you already held at the date of departure are charged to UK CGT in the year you return.

s.10A does not bite where your non-residence is genuinely long-term (more than 5 years on the standard test). It does bite where the absence was a tax-motivated gap and you come back inside the threshold. So if your departure carries any early-return contingency, model the s.10A trap before you go.

The property-investor angles

Four points run right across the residence-and-domicile picture for property.

UK rental income is taxed regardless of residence

Be clear on one thing the looser non-dom commentary tends to blur: your UK rental income could never have sat outside UK tax under the remittance basis. UK-source rental income from UK property has always been taxed on the arising basis, whatever your domicile or residence, and the FA 2025 reform does not change that.

If you are non-resident, the machinery is the Non-Resident Landlord (NRL) scheme under ITA 2007 Part 14 Chapter 5 and SI 1995/2902. The NRL scheme runs off a "usual place of abode" test, not the SRT directly, so if your usual place of abode is outside the UK you fall within the scheme even where a borderline SRT analysis points the other way. Under it your tenants or letting agents must withhold UK basic-rate income tax on your rent, unless HMRC has approved you for gross payment on the NRL1 application.

NRCGT on UK property is unchanged

TCGA 1992 Sch 4ZZB and the wider NRCGT framework apply UK CGT to non-residents who dispose of UK land, and they apply regardless of domicile. If that is you, the 60-day NRCGT return is the deadline to watch, and the FA 2025 reform leaves NRCGT untouched.

ATED applies to companies regardless of residence

The Annual Tax on Enveloped Dwellings applies to companies (and certain other enveloped structures) holding UK residential property valued over the relevant threshold. Company residence is irrelevant. If you hold property this way, the 5-yearly revaluation is the compliance point to diarise.

Worldwide asset exposure turns on residence and LTR

The residence question matters most for your worldwide-asset position. If you are UK-resident with overseas-property rental income, you are taxed on that worldwide income (subject to the 4-year FIG window if eligible). If you have overseas-property capital gains, they are taxed on the arising basis (subject to FIG, and to the narrow CGT rebasing election for 2017-cohort claimants). The LTR test then pulls worldwide-situs assets into UK IHT once you cross the 10-of-20 threshold. So every extra year of UK residence carries both an immediate income and CGT cost and a tick on the LTR clock for IHT.

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Step 1 of 2, about you

Step 1 of 2, about you

What happens if you leave the UK

Three operative tests apply on departure:

  1. SRT day-count plus ties test for the current tax year. A split-year claim under one of Cases 1 to 3 may limit UK tax to the pre-departure part of the year.
  2. NRL scheme "usual place of abode" trigger. Once your usual place of abode shifts outside the UK you come within the NRL scheme, and that test can bite ahead of the SRT result in some scenarios.
  3. Temporary non-residence s.10A anti-avoidance. Go away for a short enough period that you are back inside 5 years and any gains you realised during the absence on pre-departure assets are taxed in the year you return.

The real departure question is: are you actually leaving? A genuine long-term departure (no return inside 5 years, with SRT non-residence cleanly established each year) puts your foreign-source gains and income outside UK tax. A short, bracketed absence does not.

What happens if you arrive in the UK

Three planning windows apply:

  1. Split-year claim under SRT Cases 4 to 8. Limits UK tax to the post-arrival part of the year.
  2. FIG regime claim under ITTOIA 2005 s.845A. 4 years of full foreign-income and gains exemption if you meet the 10-year-prior-non-residence gateway. The claim costs you your personal allowance, dividend allowance, and CGT annual exempt amount, so it needs year-by-year modelling.
  3. IHT LTR clock. The 10-of-20 test starts ticking from your first UK-resident year. If your estate is large, planning around that 10-year horizon is critical, particularly the timing of any trust creation (excluded-property trusts set up before LTR onset keep protected status under IHTA 1984 s.48ZA).

The residual operation of domicile

Domicile has not been abolished as a legal concept. It continues to operate in three contexts:

  • Trust attribution under s.48ZA transitional architecture. The boundary between excluded-property trusts created before LTR onset and those created after turns on the settlor's status at trust creation, which references domicile in some transitional fact patterns.
  • Private international law. Cross-border succession, family law, conflict of laws. The Domicile and Matrimonial Proceedings Act 1973 architecture continues to apply.
  • Double taxation agreements. Treaties that retain domicile language in the residence article (a minority of UK DTAs) continue to apply that language for treaty-purposes residence determination.

For your mainstream UK income tax, CGT and IHT position as a property investor, domicile no longer drives the answer. Residence does.

Worked examples

  1. UK national leaving for Dubai 1 September 2026 to take up full-time employment. SRT Case 1 split-year applies if you meet the conditions. The pre-1-September portion of 2026-27 is UK-resident; the post-1-September portion is non-resident. Foreign income and gains in the non-resident part fall outside UK tax. The NRL scheme applies on any UK rental income from the date your usual place of abode shifts. If you then return to the UK within 5 years, the s.10A temporary non-residence rule will catch the gains on your pre-departure assets.
  2. US national arriving in the UK 1 March 2026 to take up full-time employment. SRT Case 5 split-year applies if you meet the conditions. The pre-1-March portion is non-resident; the post-1-March portion is UK-resident. A FIG claim is possible for tax years 2025-26 to 2028-29 if you meet the 10-year-prior-non-residence gateway. The IHT LTR clock starts ticking from your first UK-resident year.
  3. UK-resident landlord with £75,000 UK rental income plus £30,000 Spanish rental income. Your UK rental is taxed at normal arising-basis rates. The Spanish rental is taxed on the arising basis, with a Spanish tax credit available under the UK-Spain DTA (foreign tax credit relief). If you are a new arriver within the FIG window and claim FIG for the year, the Spanish rental is exempt that year but you lose your personal allowance.
  4. Non-resident landlord (10 years overseas) with £45,000 UK rental income. The NRL scheme is operative and your UK rental is taxed on the NRL return at normal rates. Your UK personal allowance may be available under the relevant UK-overseas-country DTA (treaty-dependent). None of your foreign-source income is taxed in the UK.

Going deeper on the legacy non-dom rules

If you are working through the transitional rules for the old non-dom regime, these cover the detail:

Whether you are a UK-property-owning expat weighing a departure or return, a new arrival planning a UK purchase alongside your tax position, an adviser running residency and domicile assessments for property clients, or a settlor or beneficiary with UK property held in pre-FA-2025 structures, the form at the foot of the page is the route to a structured assessment.