What is tax residency?

Tax residency is about where you or your business are treated as resident for tax purposes under local tax rules. The rules are different for people and for registered businesses. It is possible to be a tax resident in more than one country.

If you are a sole trader, you’re usually a tax resident where you:

• Spend most of the year

• Have your main home or family

• Have your main life and money ties

Examples:

• You live most of the year in the UK and your home and family are in the UK. You are likely a UK tax resident.

• If you split your time, you might be a tax resident in one or both countries. In the UK, 183+ days in a tax year usually means a UK tax resident. With fewer days, HMRC considers where your home and other ties are. See HMRC’s Statutory Residence Test for details.

If you are a registered business, you’re usually a tax resident where you:

• Are registered or incorporated

• Are managed and controlled – for example, where directors or partners make key decisions

Examples:

• A UK-registered company with directors running the business from the UK is almost always a UK tax resident.

• A UK-registered company that is actually managed from another country might also be tax resident in that other country