Tests for Scottish taxpayer status: overview
The Scotland Act sets out a number of tests to determine whether an individual is a Scottish taxpayer.
In order for an individual to be a Scottish taxpayer, they must be UK resident for tax purposes – an individual who is not UK tax resident cannot be a Scottish taxpayer.
An individual will be a Scottish taxpayer if they satisfy any of the following tests:
A. They are a Scottish Parliamentarian
B. They have a ‘close connection’ to Scotland, through either:
i. having only a single ‘place of residence’, which is in Scotland,
ii. where they have more than one ‘place of residence’, having their ‘main place of residence’ in Scotland for at least as much of the tax year as it has been in any one other part of the UK.
C. Where no ‘close connection’ to Scotland (or any other part of the UK) exists (either through it not being possible to identify any place of residence or a main residence) - through day counting.
‘Part of the UK’ is to be interpreted as Scotland, England, Wales and Northern Ireland but not Isle of Man/Channel Islands.
If an individual is identified as being a Scottish taxpayer that status applies for a whole tax year - it is not possible to be a Scottish taxpayer for part of a tax year.
However, it should be noted that, in a year that the individual becomes or ceases to be UK tax resident the extent to which income in that tax year is subject to income tax at the Scottish rates remains subject to ‘split year’ treatment under the statutory residence test.