skip to main content

Split Year Treatment

A comprehensive guide to help people understand if they may benefit from split year tax treatment in the UK and save themselves from paying tax on some of their worldwide income.

Last updated 13 July 2021 at 10:54

If you have been a tax resident of the UK for some of the tax year, but for the remainder you were considered a UK non-resident you may be able to split the tax year into two parts and therefore only be liable for UK tax in the part you were considered a tax resident rather than the whole year.

In the UK, you would normally be considered a tax resident in the UK if you meet the criteria set out in the Statutory Residence Test. Under UK tax rules anybody who is tax resident in the UK is required to pay tax on their worldwide income and capital gains to the HMRC.

The major benefit to expats and non-UK citizens is significant if part of the tax year is spent in a country that has favourable tax rules, such as the UAE where you are not required to pay tax on your income.

For working expats, it is very common to be required to move abroad part way through the tax year either with their existing employment or for new work that requires them to live abroad. While there are many considerations that will determine when or where somebody works, the tax scenarios should not be ignored, and you may wish to investigate whether you would benefit from one of the scenarios that split year treatment can offer.

Conditions when split year treatment may apply

There are six scenarios where split year treatment may apply, and we have looked at these in order of commonality below.

Split year treatment: conditions for UK leavers

The first three conditions specifically deal with people who were considered tax resident of the UK at the start of the tax year (i.e. on 6th April of any given year).

  • Begin full time work outside the UK
    If you work overseas for 35+ hours per week, spend fewer than 30 days working full time (i.e. more than three hours per day) in the UK and spend fewer than 91 days in the UK, you would be considered a non-resident based on the sufficient hours overseas test.
  • Your partner begins to work full time abroad and you join them
    If your partner (someone you live with) qualifies as a non-resident due to the sufficient hours test and you are required to move abroad during the tax year, you may be able to benefit from split year treatment – providing you spend more time living in your overseas home and do not spend too much time in the UK (i.e. more than 90 days generally or 30+ days working).
  • You cease to have a home in the UK
    If you move abroad during the tax year, no longer have a home in the UK and subsequently spend fewer that 16 days in the UK, split year treatment may apply to you. However, this is on the provision that you are either a tax resident of another country within six months or have your only home by the end of six months.

Split year treatment: conditions for people arriving in the UK

If you begin the UK tax year as a non-resident, and were considered UK non-resident for the previous tax year and move to the UK during the tax year, you may be able to qualify for split year treatment using any of the following conditions.

  • Begin working in the UK
    Probably the most common scenario for people entering the UK is when an individual arrives in the UK for full time employment during the tax year. This applies to people who were not considered a tax resident in the previous year and begin working 35+ hours a week long term (i.e. over a year).
  • Stopped working overseas, or are the partner of someone who stopped working overseas
    If you were considered a tax resident in at least one of the previous five tax years, except the previous tax year, and were working full time abroad but then stopped working (and have spent a limited number of days in the UK while working abroad), you may benefit from split year treatment if you return to the UK. This is a relatively complicated scenario and therefore will probably require further detailed analysis of your situation to establish whether you could benefit.

    Similarly, if you were the partner of someone who stopped working overseas using the above criteria and then remain a tax resident of the UK, you may benefit from split year treatment. To qualify, you would also have to have no home in the UK or spent more time in your non-UK home and spent a limited number of days in the UK.
  • Establish a home in the UK
    Similar to people who establish a home overseas, if you enter the UK and establish a home, remain a tax-resident in the UK for the following year and could not be considered a tax resident of the UK before you established your UK home, you may apply for split year treatment. If the UK home you establish is your only home, you are probably more likely to qualify as you will not have to be careful about how much time you spend in the UK to remain a tax-resident.

Testimonials from people who have used our UK tax introduction service

Quick and first consultation free without commitment in case you didn’t find it useful. Avoids having to search for experts online that you may/may not trust.

Leila G. Germany, Double Tax Treaty

Response was quick and the advice given in 15 minutes was concise, understandable to a layman and useful. I also liked the fact there was no hard sell for follow up paid consultations. As much advice as possible was given in the time frame with a simple "get back to us" if you want to take it further in the future. Excellent service with no pressure to commit. As a result, when I do need to need their paid support, I'll have no hesitation.

Gary R. Singapore, UK Capital Gains Tax

Dealing with financial issues from overseas is stressful and difficult. You take away that stress.

Darren C. Japan, Tax

Experts for Expats has been featured in...

Saga - Want to retire in the EU? What could the future hold for you? - click to see article
The Telegraph - The surprising places British expats can earn the most - click to see article
MailOnline - A third of British expats would like to move back to the UK and 40% admit they are homesick... but they will stay abroad for a better quality of life - click to see article
The Guardian - Brexit: how the new rules will change your visits to the EU - click to see article
We Checked And, Yes, Harry And Meghan Will Have To Pay Tax - We Checked And, Yes, Harry And Meghan Will Have To Pay Tax - click to see article
BBC Breakfast - Expats in Cyprus having issues with UK bank accounts - click to see article

What expats say about our experts

The consultant is highly professional, informative, kind, while keeping the communication flow in a very friendly manner, which renders the consultation as a very pleasant talk.

Steva S.

Italian Relocation introduction in Serbia

I highly recommend The service provided by Experts for Expats. They were quick, efficient and extremely helpful. I got all the answers I needed.

Jacinta G.

UK tax return introduction in Greece

This was a superb service. I had my tax query answered in a timely, efficient, professional manner and the tax expert now has a new client so win:win

Tracey M.

Statutory Residence Test introduction in Qatar

Looking for a tax expert with knowledge of both the US and UK as my circumstances changed was quite daunting. Experts for Expats made it easy - and found me an excellent, knowledgable consultant. 

Simma G.

US/UK tax matters introduction in United Kingdom

A very knowledgeable consultant gave me a thorough explanation of the issues involved, which was extremely helpful.

Warren B.

UK/US Tax introduction in United Kingdom

In my particular case the referral was very speedy., the advisor was very confident, had relevant qualifications and knowledgeable about the legislatives framework and the in relevant jurisdiction and products was clearly up to date with a good fit

Neil B.

Pensions introduction in Australia

The advice was clear and tailored for my personal situation. I was very impressed at the level of detail. Your advisor is clearly very knowledgable. Although I have no immediate need for assistance, I will certainly reach out when the time comes. Many thanks once again.

Matthew D.

UK Capital Gains Tax introduction in United States

Excellent responses and consultant was honest enough to admit that I didn’t need to pay for ongoing support. He provided the advice needed.

Ian T.

Double Tax Relief introduction in China