Statutory Residence Test (SRT)
Your tax residence is very important as, to a large extent, it dictates how you are taxed in the UK.
UK residents are, generally, liable to UK tax on their worldwide income and gains. Whereas, long-term non-UK residents are, generally, only subject to UK tax on their UK source income, plus on taxable gains from the disposal of certain UK assets, including residential property.
Since 6 April 2013, the Statutory Residence Test (SRT) has been used to determine whether you are resident in the UK for tax purposes. The rules of this test are complex, particularly relating to splitting a tax year into resident and non-resident parts, but broadly, there are three parts to this test which need to be considered in turn.
The first part of the test will “conclusively” determine that you are not resident in the UK if you meet one of the automatic overseas tests.
If none of these tests are met, you will be “conclusively” UK resident for the tax year, if you meet one of the automatic UK tests.
If none of the conditions of either of the automatic test apply, the UK ties test will be used to determine whether you are resident or not. Based on the number of ties you have with the UK, this determines the number of days you can spend in the UK without becoming UK resident.