What a difference a day count makes:
The implications of the Coronavirus pandemic on the UK tax status of non-domiciled individuals

26 March 2020

International clients with a UK footprint often like a good spread sheet: specifically, a spread sheet covering their days spent in the UK and those spent overseas in the period 6 April to the following 5 April. This period is the UK tax year, and well-advised international clients – those considered neither resident nor domiciled in the UK - are all too aware that not keeping track of their UK day count may make them UK resident and within the scope of UK income and capital gains tax on their worldwide income and gains. Numbers matter.

A day count of 183 or more UK days means you are automatically UK resident, but this is the simplest rule and you can be resident if your circumstances fall within any of the other more complex provisions of the Statutory Residence Test. You clock up a UK day if present in the UK at midnight, but in light of the recent overwhelming impact of COVID–19 on freedom of people’s movement, it is worth reviewing what HM Revenue & Customs (HMRC) considers UK days which do not count due to “exceptional circumstances”. The essence of such exceptional circumstances is that they must be beyond your control or could not reasonably be foreseen or predicted.

Thankfully, HMRC recognises in its guidance that the pandemic may impact your ability to move freely to and from the UK, but is careful to stress that whether days can be disregarded will always depend on the facts and circumstances of each case.

The guidance (at the time of writing) does confirm that if you:

  • are quarantined or advised by a health professional or public health guidance to self-isolate in the UK as a result of the virus;
  • find yourself advised by official Government advice not to travel from the UK as a result of the virus;
  • are unable to leave the UK as a result of the closure of international borders; or
  • are asked by your employer to return to the UK temporarily as a result of the virus;

the circumstances are considered as exceptional.

COVID-19 aside, the exceptional circumstances rule is nuanced and it is equally important to be aware of what HMRC does not consider exceptional to properly gauge its scope. Delayed or missed flights due to traffic disruption, train delays, cancellation or car breakdown is not considered beyond someone’s control to manage and therefore not exceptional. Equally, choosing to come to the UK for elective dentistry or cosmetic surgery, medical treatment or even because of life events such as birth, marriage, death and divorce are not regarded as exceptional circumstances. The recognised types of exceptional circumstances in the legislation are national or local emergencies such as war, civil unrest or natural disasters and a sudden or life-threatening illness or injury, but even where circumstances do qualify there is a limit of 60 days. Any UK days over this limit will be counted, even if due to the same or different exceptional circumstances.

It is not clear whether such days spent in the UK because of COVID–19 will still be exceptional to the extent they overrun 60 days. Extraordinary times arguably call for an extraordinary dispensation to increase the 60 day limit for COVID–19 cases, but we await further guidance on this point.

If you have concerns about your UK residency status or any issues outlined here, please get in touch with a member of our private client team.

About the author

Julie Jaggin is a Senior Associate in the Private Client team. Julie has extensive experience of advising both UK-based and international clients on a wide range of private client work, including pre-UK immigration tax-planning, lifetime gifting from UK and offshore structures, the creation and administration of UK and offshore trusts, Wills, family constitutions, probate, corporate tax-planning vehicles, lasting powers of attorney and deputyships. 

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