Split year treatment

An individual is treated as resident in the UK when they have either arrived in the UK or left the UK permanently during the tax year. However, under the Statutory Residency Test (SRT) split year treatment may apply. When split year treatment is applicable, the tax year is split into two parts:

• A UK part
  Where the individual’s UK and worldwide income would be assessed in the UK

• An overseas part
  Where only the individual’s UK income would be assessed in the UK

If an individual qualifies for split year treatment, this is required to be claimed and the individual does not have a choice if the relevant cases are met.

There are eight cases that may apply to an individual claiming split year treatment, cases 1 to 3 would apply to a person who has left the UK, cases 4 to 8 would apply to a person who has arrived in the UK. For the case to be met, the individual must meet all the conditions and all cases must be considered.

• Case 1 – Starting full-time work overseas

For an individual to meet the criteria for Case 1, they must be a UK resident for the tax year in question and be a UK resident for the previous tax year. They also must be a non-UK resident in the following tax year. The overseas work criteria during a relevant period must also be met.

• Case 2 – Partner of someone starting full-time work overseas

For an individual to meet the criteria for Case 2, they must be a UK resident for the tax year in question and be a UK resident for the previous tax year. They must also have a partner whose circumstances fall within Case 1 for the tax year or previous tax year and have been living together in the UK either at some point in the tax year or previous tax year.

• Case 3 – Ceasing to have a home in the UK

For an individual to meet the criteria for Case 3, they must be a UK resident in the tax year in question and be a UK resident for the previous tax year. They also must be a non-UK resident for the tax year following the split year. The individual must have at least one home in the UK at the start of the tax year and at some point in the year cease to have any home in the UK for the rest of the tax year. The individual must spend fewer than 16 days in the UK after the date they left in the tax year.

• Case 4 – Starting to have a home in the UK only

For an individual to meet the criteria for Case 4, they must be a UK resident for the tax year and be a non- UK resident for the previous tax year. They must not meet the “only home test” at the start of the tax year, but at some point in the tax year they must meet the “only home test” and continue to do so until the end of that tax year.

• Case 5 – Starting full-time work in the UK

For an individual to meet the criteria for Case 5, they may receive split year treatment for a tax year if they start to work full-time in the UK. They must be a UK resident for the tax year and be non-UK resident for the previous tax year. The third automatic UK test will also be applicable.

• Case 6 – Ceasing full-time work overseas

For an individual to meet the criteria for Case 6, they must be a UK resident for the tax year and must not have been a UK resident for the previous tax year. The overseas work criteria for the relevant period must also be considered.

• Case 7 – Partner of someone ceasing full-time work overseas

For an individual to meet the criteria for Case 7, they must be a UK resident for the tax year and a non-UK resident for the previous tax year. They must also have a partner whose circumstances fall within the criteria for Case 6.

• Case 8 – Starting to have a home in the UK

For an individual to meet the criteria for Case 8, they must be a UK resident in the tax year and a non-UK resident for the previous tax year. They must also be a UK resident for the following tax year which must not be a split year. They must not have a home in the UK at the beginning of the tax year but start to have a UK home at some point during the tax year.

If an individual is not out of the UK for at least a complete tax year, if they are leaving the UK, then split year treatment cannot be claimed.

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