Split Year Treatment UK: Arrival, Departure and the Statutory Residence Test

What Is Split Year Treatment?

When you move to or from the UK part-way through a tax year, you would ordinarily be treated as either UK resident or non-UK resident for the whole of that year. This could produce unfair results -- taxing someone on worldwide income for months they spent entirely abroad, or exempting income earned during months they actually lived in the UK.

Split year treatment solves this problem by dividing the tax year into two distinct periods:

• The UK part: the period during which you are treated as UK resident, taxed on worldwide income.
• The overseas part: the period during which you are treated as non-UK resident, taxed only on UK-source income.

The dividing date between the two parts is not always the date you physically moved. It is determined by the specific case under the Statutory Residence Test (SRT) that you meet, which may result in a different date.

Split year treatment is governed by Part 3 of Schedule 45 to the Finance Act 2013, which introduced the SRT. It does not apply automatically -- you must qualify for one of the eight defined cases, and you must claim it on your Self Assessment return.

The Statutory Residence Test: The Foundation

Before split year treatment can be considered, the overall question of your UK tax residence for the year must be settled. The Statutory Residence Test has three layers:

1. Automatic overseas tests: If you meet any of these (for example, you spent fewer than 16 days in the UK, or you spent more than 183 days abroad with fewer than 91 days in the UK), you are automatically non-UK resident.

2. Automatic UK tests: If you meet any of these (for example, you spent 183 or more days in the UK, or you have your only home in the UK), you are automatically UK resident.

3. Sufficient ties test: If neither automatic test applies, you count your 'ties' to the UK (family, accommodation, work, 90-day tie, country tie) and determine residence based on days spent in the UK combined with the number of ties.

Split year treatment can apply to individuals who are UK resident for the full year under the SRT but who meet one of the eight cases. The logic is that even though you are technically UK resident for the whole tax year, the SRT acknowledges that part of the year was genuinely spent overseas.

The Eight Cases of Split Year Treatment

Cases for Individuals Leaving the UK (Cases 1-3)

Case 1: Starting Full-Time Work Overseas

You qualify if:

• You were UK resident in the previous tax year
• In the year of departure, you begin working full-time overseas
• You are not UK resident in the following tax year (or, if you are, the later year meets specific conditions)
• You meet the overseas work criteria (broadly, working at least 35 hours per week, with sufficient overseas days)

The UK part ends on the day before you begin your qualifying overseas work period. The overseas part runs from that date to the end of the tax year.

Case 2: The Accompanying Partner or Dependent

If your partner moves abroad for full-time work (meeting Case 1 conditions) and you accompany them -- ceasing to have a UK home during the tax year -- you may qualify under Case 2 even without working full-time abroad yourself.

Case 3: Ceasing to Have a UK Home

If you cease to have any home in the UK and you are not UK resident in the following tax year, you may qualify. The UK part ends on the date you cease to have a UK home (provided you also do not return to the UK with a home for more than a specified number of nights in the following year).

Cases for Individuals Arriving in the UK (Cases 4-8)

Case 4: Starting Full-Time Work in the UK

You qualify if:

• You were not UK resident in the previous tax year
• In the year of arrival, you begin working full-time in the UK
• You have a period of UK full-time work from the date you started until at least the following 5 April

The overseas part runs from the start of the tax year to the day before you begin UK full-time work. The UK part runs from that date to the end of the tax year.

Case 5: Ceasing to Have an Overseas Home

If you previously had your only home overseas (and no UK home) and you move to the UK during the year, acquiring a UK home without retaining an overseas home, you may qualify. The overseas part runs from 6 April to the date you acquire your UK home.

Case 6: Starting to Have a UK Home Only

Similar to Case 5 but with different conditions regarding the timing and retention of overseas property.

Case 7 and Case 8

These are more technical cases covering situations where a person who was overseas temporarily returns to the UK, or where a UK-resident spouse or civil partner returns to the UK following a period of overseas work. They are less commonly encountered but can be important in specific cross-border family situations.

The Overseas Part: What Are You Taxed On?

During the overseas part of a split year, you are treated as if you were non-UK resident. This means:

• UK-source income (such as UK employment income, UK rental income, UK bank interest, UK dividends) remains taxable in the UK.
• Overseas income is not subject to UK income tax, even though you may receive it during a period when you are technically a UK resident for the full year.

However, double tax treaties may modify this position. If you are also tax resident in another country during the overseas part of your split year, that country's rules -- and the applicable double tax treaty -- will determine which country has the primary right to tax different types of income.

Capital Gains During the Overseas Part

A significant benefit of split year treatment is the CGT position during the overseas part. Disposals of chargeable assets (other than UK land and property) made during the overseas part are generally not subject to UK CGT.

This can be particularly valuable if you are planning to sell a significant asset -- shares in a company, a portfolio, or an overseas property -- in the year you are leaving the UK. If the disposal falls in the overseas part, no UK CGT arises (though CGT may be due in the destination country).

Important caveat: The non-resident CGT rules for UK residential property apply regardless of split year treatment or non-residence. If you dispose of UK land or property, UK CGT applies at any time. The CGT rates for residential property in 2026/27 are 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers.

Temporary Non-Residence Rules

There is an anti-avoidance rule that prevents individuals from leaving the UK, realising large gains or income during a short period of non-residence, and then returning to the UK without paying any tax. These are known as the temporary non-residence rules.

Under these rules, if you leave the UK and return within five complete tax years, certain income and gains that arose during the overseas period may be 'clawed back' and taxed in the year of return. The assets covered include:

• Lump sum pension withdrawals
• Certain capital gains on assets held before departure
• Dividends from close companies (broadly, companies you control)

This rule does not affect the split year treatment itself, but it is critical planning context for anyone who intends to leave the UK temporarily, realise significant gains or income, and then return.

Dual Residence and Double Tax Treaties

Some individuals are simultaneously tax resident in the UK and another country -- for example, under the other country's domestic residency rules. In these cases, the residence article of the relevant double tax treaty (if one exists) determines which country has the primary right to tax various types of income and gains.

The most common tiebreaker criteria in UK double tax treaties are (in order):

1. Permanent home available
2. Centre of vital interests (personal and economic ties)
3. Habitual abode
4. Nationality
5. Mutual agreement between the tax authorities

If you are considered resident only in the other country under the treaty tiebreaker, the treaty may override the UK's domestic SRT rules to treat you as non-UK resident for treaty purposes -- potentially disqualifying split year treatment or limiting the UK's taxing rights.

Dual residence situations are complex and almost always require specialist advice.

Claiming Split Year Treatment

Split year treatment must be claimed in your Self Assessment tax return. There is no automatic entitlement -- HMRC does not apply it without a claim.

The claim is made in the Residence, domicile and remittance basis supplementary pages (SA109) of your return. You indicate which case of split year treatment applies and the relevant dates.

HMRC can enquire into the claim, so it is important to retain evidence of:

• The date you ceased or established a UK home
• The date you began UK or overseas full-time work
• Your day counts (days in the UK and overseas)
• Your employment contract or self-employment records

Common Mistakes and Pitfalls

Assuming split year treatment applies automatically. It does not. Many people fail to claim it or claim the wrong case.

Getting the start date wrong. The date the overseas or UK part begins is determined by specific statutory tests, not the date you physically moved or started a job.

Ignoring the SRT day counting rules. Even during the overseas part of a split year, days spent in the UK may count towards your UK day total for residence purposes in that year.

Not considering temporary non-residence rules. Planning to come back to the UK within five years? Take advice before realising large gains.

Failing to understand treaty override. If you are resident in a treaty country, the treaty tiebreaker may affect your UK tax position even if you meet the SRT UK resident tests.

Practical Example: Leaving the UK

Emma works in London and leaves for a full-time role in Germany on 1 October 2026. She sells her UK flat in August 2026 and sets up in Berlin with no UK home remaining. She qualifies under Case 3 (ceasing to have a UK home).

Her UK part runs from 6 April 2026 to 30 September 2026 (the date before she ceased to have a UK home). During this period, all her income is taxed on a worldwide basis as a UK resident.

Her overseas part runs from 1 October 2026 to 5 April 2027. During this period, her German salary is not subject to UK income tax (subject to the UK-Germany double tax treaty). If she had sold shares in October 2026 rather than a UK property, the CGT would not arise in the UK.

The sale of her UK flat in August 2026 falls in the UK part and is fully subject to UK CGT at the residential property rates (18% or 24%).

Summary

Split year treatment is a valuable provision that prevents double-counting of income in the year you move to or from the UK. You must qualify under one of eight statutory cases, and you must claim the treatment on your SA109 return. During the overseas part, UK tax applies only to UK-source income; overseas income and most capital gains are outside the UK charge. The temporary non-residence rules can claw back gains and income if you return within five years. Dual residence and double tax treaties add further complexity. Professional advice is strongly recommended for any international move.