Savanna Hoffman
International students in the UK often wonder whether they are considered UK residents. This is a complex question, as the answer depends on the context and the specific situation of the student. For example, when it comes to tax purposes, determining residency status can be challenging for international students due to their patterns of presence in the UK and their likely maintenance of a 'home' in their country of origin. Additionally, the criteria for residency differ depending on whether one is inquiring about tax residency, residency for driving license applications, or residency for tuition fee purposes.
Is an international student a UK resident?
| Characteristics | Values |
|---|---|
| Tier 4 Visa | Not considered a UK resident |
| Residence for more than 3 years | Considered a UK resident |
| Tax residence | Residence for more than 6 months |
| Statutory Residence Test (SRT) | Depends on ''home' and full-time work |
| Foreign income | Exempt from UK tax if used for course fees or living costs |
| Double-taxation agreement | Depends on the country; may need to pay tax on foreign income |
| 'Sufficient ties' test | Considered a UK resident if strong ties and number of days spent in the UK |
| 'Long residence' category | Non-UK nationals under 18 and lived in the UK for at least 7 years or 18 and lived in the UK for at least 20 years |
| 'Settled' in the UK | Ordinarily resident in the UK without immigration restrictions |
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What You'll Learn
International students and council tax
International students in the UK may be considered residents for tax purposes if they have lived in the country for longer than six months or 183 days. However, it is important to note that residency requirements vary, and some sources state that an individual must live in the UK for longer than three years to be considered a resident. International students with taxable income from overseas need to determine their residence status under the statutory residence test (SRT) to know if they need to pay tax on that income in the UK.
Council Tax is a fee set by local authorities in England, Scotland, and Wales to fund local services such as rubbish collection, the police, and the fire brigade. The fee is per household and is based on the value of the dwelling. People who rent or own their homes are generally responsible for paying Council Tax. However, full-time students are typically exempt from paying Council Tax. To be considered a full-time student for Council Tax purposes, an individual must meet specific criteria, such as being under 20 years old and studying for a qualification up to or equivalent to A-level. International students enrolled in a full-time course at an educational institution in the UK or the European Union may also be considered full-time students for Council Tax purposes.
It is worth noting that local authorities determine sole or main residence on a case-by-case basis. If an international student is deemed to be 'solely or mainly' resident in the UK and their course does not last for an academic or calendar year, they may not meet the definition of a student for Council Tax exemption. Academic visitors, for example, do not qualify as 'students' and are usually counted as resident adults for the bill. However, students studying for specific qualifications, such as nursing, may be exempt from paying Council Tax, even if they do not meet the standard definition of a student.
Additionally, some local authorities may charge Council Tax for the period before an international student's course starts or after it ends. Students in this situation may be charged Council Tax if they are no longer considered full-time students, even if they are waiting to start another course. However, students should not be charged during vacation periods between terms or semesters while their course is ongoing.
While Council Tax exemptions typically apply to full-time students, it is important to note that if there is someone in the household who is not a full-time student, the household may still be eligible for a discount. International students can refer to resources provided by their Students' Union or institution's advice service for more specific information regarding Council Tax.
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Tier 4 visas and residency
The Tier 4 Student visa route has been replaced by the Student Visa route. Current Tier 4 visa holders can continue their studies under the conditions of their existing visa, and can apply for extensions if they meet the necessary criteria, such as progressing to a higher level of study.
The Tier 4 visa was typically required for full-time university study. To apply for this visa, applicants had to satisfy several criteria, including:
- Being offered a full-time place at a UK educational institution on a course that meets certain requirements (full-time equates to 15 hours of classroom study per week)
- Attaining a minimum of 40 points according to the points-based assessment criteria
- Meeting the English language requirement, unless an exception applied
- Evidence of financial maintenance to cover course fees and accommodation
International students may need to pay tax on their income in the UK. This depends on their residence position under the statutory residence test (SRT). Students with a taxable income from overseas will need to work out their residence position under the SRT to determine if they need to pay tax on that income in the UK. Students may have income from sources other than employment or investments, such as scholarships or grants, which may be exempt from UK tax.
Students are very unlikely to meet the tests for full-time work in the UK or overseas while they are studying, even if they carry out full-time work for a few weeks outside of term time. For tax years up to and including 2024/25, even if a student is a tax resident in the UK, they may escape UK tax on foreign income and gains by virtue of their non-domicile status and the remittance basis.
In terms of residency, it is unclear whether students on a Tier 4 visa are counted as UK residents. Some sources state that Tier 4 visas are not counted towards residency, while others state that if you are living in the UK for longer than 6 months, you are probably a tax resident.
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Tax residence status
The tax residence status of international students in the UK is determined by the statutory residence test (SRT), the same test that applies to any other individual. However, students often have a 'home' in their home country and a residence in the UK, which can make it difficult to determine their residence status.
If you are an international student with taxable income from overseas, you need to determine your residence position under the SRT to know if you need to pay tax on that income in the UK. Students may have income from sources other than employment or investments, such as scholarships or grants, which may be exempt from UK tax. There are also special international rules that apply if your overseas employer is sponsoring you during your training or if you receive certain payments from sources outside the UK for maintenance, education, and training.
To be considered a UK resident for tax purposes, you generally must meet one or more of the automatic UK tests or the sufficient ties test and not meet any of the automatic overseas tests. Specifically, this means that you spent 183 or more days in the UK in the tax year (6 April to 5 April the following year), or your only home was in the UK for 91 days or more in a row, and you visited or stayed in it for at least 30 days of the tax year. However, if you spend fewer than 183 days in the UK during a tax year, working through the SRT can be difficult, as the academic year and tax year are not aligned.
For tax years up to and including 2024/25, even if a student is a tax resident in the UK, they may escape UK tax on foreign income and gains by virtue of their non-domicile status and the remittance basis. 'Unremitted' means that the income is not brought to the UK or used or enjoyed in the UK. From 2025/26 onwards, the remittance basis is no longer applicable, but international students may be eligible for relief under the new regime which applies to foreign income and gains from 6 April 2025.
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Foreign income and tax
Firstly, it is important to determine residence status under the statutory residence test (SRT). International students may be considered UK residents for tax purposes if they stay in the UK for a certain period, typically more than 183 days or 6 months in a tax year. The tax year in the UK runs from 6 April to 5 April of the following year.
Secondly, the nature of the income and its usage come into play. Foreign income and gains that are used for course fees, living costs, or maintenance may be exempt from UK tax, especially if they fall under the threshold of £15,000 per year (excluding course fees). Income from scholarships, grants, or sponsorships may also be exempt from UK tax. Additionally, double taxation agreements between the UK and the student's home country can play a significant role. These agreements can prevent students from paying tax on foreign income and gains, provided that certain conditions are met. The agreements may have specific terms, monetary limits, or purposes for the income brought into the UK.
Furthermore, students' employment status and income sources can impact their tax obligations. Students who work in the UK, even during breaks, may have different tax considerations compared to those who do not work. Students with income from employment or investments may need to pay tax on those earnings, while those with income from financial support, family gifts, or personal savings may have different tax treatments.
It is worth noting that each student's situation is unique, and seeking professional advice is recommended to navigate the complexities of UK tax laws and international student status.
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'Settled' status and eligibility
The settled status of international students in the UK is a complex issue and depends on several factors. Firstly, let's define what it means to be "settled" in the UK. According to immigration law (specifically, section 33(2A) of the Immigration Act 1971), a settled person is someone who is ordinarily resident in the UK without any immigration restriction on the length of their stay.
Now, for international students, the concept of residency can be tricky due to their likely patterns of presence. Generally, to be considered a resident for tax purposes, an individual must be physically present in the UK for at least 183 days in a tax year (6 April to 5 April). However, this can be challenging for students as the academic year (usually September to July) does not align with the tax year. Additionally, the determination of residency under the statutory residence test (SRT) considers where an individual has a "home". Students typically have a “home” in their home country and a term-time residence in the UK, which can blur the lines of residency.
For international students on a Tier 4 Visa, there is conflicting information. Some sources indicate that Tier 4 Visa holders are not considered UK residents, while others suggest that residing in the UK for longer than six months under this visa type would qualify one as a UK resident. It is important to note that international students are typically exempt from paying council tax.
Now, regarding eligibility for settled status, this depends on the specific circumstances of the student. The EU Settlement Scheme, which allows individuals to apply for settled or pre-settled status, has certain criteria. Firstly, the deadline for applying for this scheme was 30 June 2021, with some exceptions for late applications. To be eligible, individuals must have been living in the UK by 31 December 2020 and be from the EU, Iceland, Liechtenstein, Norway, or Switzerland. Those with pre-settled status can achieve settled status by proving they have been resident in the UK for at least 30 months in the last 60 months, which equates to a five-year continuous qualifying period. Single absences of up to 12 months are allowed under specific circumstances, such as illness or study.
For students who are not UK nationals, there is the 'long residence' category for eligibility. Under this category, individuals must be under 18 and have lived in the UK for at least seven years, or be 18 or over and have lived in the UK for half their life or at least 20 years. Additionally, UK nationals residing in specified British Overseas Territories may be eligible for home fee status and tuition fee loans.
It is important to note that eligibility for student finance and fee status varies across the UK nations. Students are advised to discuss their specific circumstances with their university and Student Finance England or the relevant student funding body in Scotland, Wales, or Northern Ireland.
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Frequently asked questions
Whether or not you are considered a UK resident depends on several factors, including the type of visa you hold, how long you have lived in the UK, and whether you have previously been a UK resident. International students on a Tier 4 visa are generally not considered UK residents. However, if you have lived in the UK for more than three years, you may be considered a resident.
International students are typically exempt from paying taxes on their foreign income or gains as long as they are used for course fees or living costs. However, it is important to note that this exemption only applies if the country your income is from has a 'double taxation agreement' that covers students. Additionally, if your income exceeds certain thresholds, you may be required to report it.
The SRT is a test used to determine the residence position of individuals, including international students, for tax purposes. It considers factors such as where you have a 'home', whether you carry out full-time work in the UK or overseas, and the number of ''ties' you have to the UK.
Residence status for tuition fee purposes is determined based on various criteria, including age, previous study, course, and higher education provider. Generally, individuals must be resident and 'settled' in the UK on the first day of the academic year to be eligible for home student status. British citizens, individuals with indefinite leave to remain, or those granted the right to stay under the EU Settlement Scheme will typically meet the criteria.
