ACCA Advanced Taxation (ATX) Practice Exam

What determines if an individual becomes a UK resident after acquiring a UK home?

1. They must have had sufficient ties with the UK previously

2. They can only be UK resident from the date they purchase the home

3. They must only stay there for more than 90 consecutive days

4. They must work full time in the UK

The correct answer is: They can only be UK resident from the date they purchase the home

To determine if an individual becomes a UK resident after acquiring a UK home, it is important to consider the residence rules established by HM Revenue & Customs (HMRC). The specific criteria related to establishing residency consider multiple factors. The correct answer highlights the notion that an individual can only be classified as a UK resident from the date of the purchase of the home, rather than retroactively. This reflects the legal principle that the mere acquisition of a property does not automatically confer residency status on an individual. Residency in the UK is assessed primarily based on the Statutory Residence Test, which evaluates the number of days spent in the UK and other ties to the country. Other choices suggest alternative criteria that are either incorrect or incomplete for determining residency. For example, simply having sufficient ties with the UK prior or residing for more than 90 consecutive days does not guarantee that an individual is a resident, as the overall residency status depends on the evaluation of numerous days and ties established over a tax year—not just the possession of property. Working full-time in the UK can impact residency but is not the sole factor in establishing residency. In summary, the acquisition of a UK home marks the starting point for determining residency status, reinforcing that residency status is closely tied to the