ACCA Advanced Taxation (ATX) Practice Exam

What happens when a returning individual has a partner who meets the residency conditions?

1. They both become UK residents from that date

2. The partner automatically loses residency status

3. They become residents when the partner joins them

4. They have to apply for residency separately

The correct answer is: They become residents when the partner joins them

When considering the implications of an individual returning to the UK and their partner's residency status, the concept of residency in tax law plays a critical role. The correct choice indicates that the returning individual and their partner will become UK residents when the partner meets the residency conditions. This statement reflects the principle that an individual’s tax residency can be influenced by the residency status of their partner. Specifically, if one partner qualifies as a UK resident, it creates a stronger connection for the returning individual to also attain residency status. This is based on criteria outlined in the Statutory Residence Test, which can include the presence and residency of a partner as a significant factor. In contrast, the other options suggest various misconceptions. The implication that both partners automatically become residents at the same date isn't accurate because residency is assessed based on personal circumstances and the specific test each individual must meet. The idea that the partner would lose their residency status fails to recognize that residency is based on fulfilling criteria under UK tax law, which isn't automatically revoked by association with a returning individual. Lastly, the notion that they would have to apply for residency separately misunderstands the dynamic where the partner's residency status can facilitate the process. The law recognizes how relationships can affect residency determinations, thus when one