Exceptional circumstances
Our statutory residence test sets limits as to the number of days you can spend in the UK in a tax year without being resident here for tax purposes. The rules are complicated, with the daycount threshold dependent on a number of factors, including whether or not you have been UK-resident in any of the previous three years and, in some circumstances, the number of ‘ties’ (e.g. home, family) that you have with the UK.
When counting up the days that someone has spent here, you can exclude up to 60 days where they are here because of ‘exceptional circumstances’. This covers things like unexpected health issues (e.g. you are hospitalised following a bad heart attack, just before you were due to leave the UK) or the transport shutdowns during the pandemic.
An important point of clarification as to what constitutes exceptional circumstances has recently been given by the Court of Appeal. A woman claimed that the excess 5 days she spent in the UK were because of a moral obligation to care for her alcoholic and depressed sister, who had two young children. In allowing her appeal, the court said that an individual can be prevented from leaving the UK for various reasons, including a sufficiently compelling moral obligation. There is no requirement for departure to be a legal, physical or medical impossibility.
For the days to be excluded, the circumstances do not need to be rare within the context of human society as a whole; they merely need to be exceptional within the context of the individual’s own life. The statute clearly anticipates serious illness and death as potential exceptional circumstances.
To determine whether events experienced by an individual are exceptional, those circumstances must be looked at in the round. In particular, the moral or societal obligations that the illness of a relative (or any other situation) imposes on the individual form part of the overall circumstances; they can and should be taken into account in considering whether the circumstances, as a whole, qualify as exceptional.
Whether or not you are resident in the UK will have a massive impact on your income tax, CGT and (following the changes that took place on 6 April this year) IHT position.
Don’t leave anything to chance: if you are looking to emigrate, discuss your plans with us so that we can make sure you don’t inadvertently remain UK resident.