Third Automatic Overseas Test

The third automatic overseas test is important when deciding if you are non resident for UK tax purposes.

If you pass the third AOT, you are considered non UK resident for the purposes of income tax, inheritance tax and capital gains tax. This can be a substantial benefit to your financial situation; UK non residents only pay UK tax on their UK income.

How do I pass the Third AOT test?

During the tax year in, you must meet all three qualifying criteria:

  1. You worked full time overseas
  2. You spent less than 91 days in the UK
  3. You worked less than 31 days in the UK

If it is immediately obvious that you meet all three of these criteria, then you can be considered non resident in the UK for tax purposes. If you only meet two of the eligibility tests, or you are unclear about your position, then you would be wise to seek the advice of a tax expert.

What can I do if I fail the Third Automatic Overseas Test?

If you think you’ve failed the third AOT, you may consider the Automatic Residence Test (ART) and the Sufficient Ties Test (STT), to qualify as a non-resident. In order to make sure that you are following the correct procedure, and to avoid any time wasted on the wrong paperwork, the ART must be considered before the STT.

Do the same rules apply to jobs that are based around international travel?

The rules for non resident status are modified for taxpayers in certain jobs, such as those who work for airlines, on ships or other transportation companies that travel internationally.


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