Split Year Treatment

Split Year Treatment allows individuals to split a tax year into a UK resident part, and a non-resident part. This may be important for individuals who are moving to the UK, or away from the UK, part way through a tax year.

If split year treatment applies to an individual, it means that they will only be taxed as a resident for the time that they were actually UK resident, rather than for the whole tax year.

In order to be eligible for Split Year treatment, the individual must fit into one of the following Cases, depending on whether they are leaving the UK or coming to the UK.

For Individuals Leaving the UK

An individual is eligible to split the tax year on leaving the UK if they meet the criteria for Cases 1 – 3.

  • Case 1: beginning full-time work overseas
  • Case 2: a spouse or civil partner who is moving to be with their partner overseas, where their partner meets the criteria for Case 1.
  • Case 3: ceasing to have a home in the UK.

If the individual meets the criteria for one of the Cases above it will mean that they will be considered non-resident from departure. Though note that it is not possible to receive split year treatment if an individual is resident outside the UK for less than a full tax year.

Split year treatment is a complex topic, and it is recommended that HMRC’s own guidance be referred to, in order to check. This can be found here. The original HMRC Guidance Note may be more accessible, as it is in pdf format, and this can be found here (Chapter 5).

For Individuals Arriving in the UK

An individual is eligible to split the tax year on arriving in the UK if they meet the criteria for Cases 4 – 8.

  • Case 4: starting to have a home in the UK only
  • Case 5: beginning full-time work in the UK
  • Case 6: ceasing full-time work overseas
  • Case 7: the partner of someone who is ceasing full time work overseas
  • Case 8: starting to have a home in the UK

If the individuals meets the criteria for one of the Cases above it will mean that they will be considered non-resident in the period in the tax year before they arrived. Split year treatment is a complex topic, and it is recommended that HMRC’s own guidance be referred to, in order to check. This can be found here. The original HMRC Guidance Note may be more accessible, as it is in pdf format, and this can be found here (Chapter 5).

Individuals who do not meet the criteria for Split Year Treatment

Sometimes an individual does not meet the criteria to split the tax year under one of the Cases above. This may result in double taxation if there’s an overlap in time where the country that the individual has have moved to (or from) is subjecting the individual to tax on the same income or gains. In this situation, the use of a Double Tax Agreement (if there is one in place) between the UK and the other country can be used to avoid double taxation.