Statutory residence test and exceptional circumstances

Tax statutes can be fertile ground for differences in interpretation. That said there does need to be an element of caution in not getting carried away and interpreting the statute in a way which does not observe the ordinary meaning of the words where that is possible and reads in words which simply do not exist. These issues came to the fore in the recent decision of the First-tier Tribunal in A Taxpayer (TC8464) where the tribunal was asked to provide clarity on the meaning of ‘exceptional circumstances’ for the purposes of the statutory residence test (SRT). The decision issued on 21 April 2022 was the first to ever consider what ‘exceptional circumstances’ meant in the context of applying the SRT.

Legislative background

The function of the SRT is well known – it is used to determine an individual’s residence in a tax year. The...