Apply the Statutory Residence Test to the UK tax year
The UK tax year runs from 6 April to 5 April. The Statutory Residence Test first considers automatic overseas tests, then automatic UK tests, and then the sufficient-ties test where neither automatic outcome applies. Spending 183 days in the UK is an automatic UK test, but staying below 183 days does not itself establish non-residence. Work patterns, homes and connections can produce a resident result at substantially fewer days.
Prepare a year-by-year schedule rather than a single travel total. Prior-year residence affects several thresholds; workdays and full-time work have their own technical definitions. The midnight rule also has exceptions and deeming provisions. Split-year treatment is restricted to prescribed cases and does not simply follow the date a visa was issued or a house was purchased. A founder spending time between two homes needs both the domestic analysis and, where relevant, the treaty residence analysis.
The four-year FIG regime is temporary and requires claims
From 6 April 2025, qualifying new residents can claim relief for specified foreign income and gains during their first four resident tax years after at least ten consecutive nonresident years. Earlier arrivals may use only the remainder of their original four-year window. The clock does not restart because the legislation changed, and unused years are not an indefinite tax allowance.
Classify the receipts before estimating savings. Foreign dividends, investment income, qualifying foreign gains and profits of a trade carried on wholly abroad may be covered; foreign employment earnings use separate rules, including Overseas Workday Relief where applicable. UK work or UK business activity does not become foreign merely because an overseas company pays. Claims through Self Assessment can remove personal and capital-gains allowances and affect other calculations. Model the fifth year before arrival and keep historic remittance-basis funds distinct from new qualifying receipts.
Company residence follows incorporation and actual control
UK incorporation normally creates UK corporate residence, subject to statutory and treaty rules. A foreign-incorporated company can also be resident where its central management and control actually takes place in the UK. HMRC’s case-law guidance examines real strategic control rather than treating the venue written in board minutes as conclusive.
A founder who retains all meaningful decisions while living in Britain needs an analysis of that actual arrangement. Overseas directors must exercise the authority claimed for them; they cannot merely record decisions already made elsewhere. Company residence, a UK permanent establishment, payroll, transfer pricing and anti-avoidance attribution are separate questions. A foreign bank account or local registered office answers none of them by itself. Document the allocation of authority, contracts, financial risk and operational work before the individual move, and assess the relevant treaty if both countries regard the company as resident.
Inheritance tax uses a different residence clock
Since 6 April 2025, the long-term-residence framework can bring non-UK property into inheritance-tax scope, broadly using residence in ten of the preceding twenty tax years. A person who leaves can remain within that framework for a further three to ten years, depending on the prior residence history. UK property can remain relevant even where the person is not a long-term UK resident.
This is independent of the four-year FIG regime. A person can have an income-tax relief claim and still need a separate estate and trust assessment; equally, leaving the UK does not necessarily end all inheritance-tax exposure. Before transferring assets or settling a trust, identify the owner, property situs, residence history, prior gifts and any transitional treatment. The useful planning model integrates annual income, a future business sale and succession instead of treating a temporary foreign-income exemption as the entire UK tax system.
Sources & research notes5 references
Sources supporting this guide. Research draft awaiting editorial review.