Split Year Treatment: How It Works for Leavers and Arrivers

When you leave the UK part-way through a tax year, or arrive in the UK mid-year from abroad, you do not automatically pay UK tax on worldwide income for the entire year. Split year treatment — formally provided under Schedule 45 of the Finance Act 2013 — allows the tax year to be divided into a UK-resident part and a non-resident part. Income and gains are then taxed only on the part to which they properly belong.

This sounds straightforward in principle. In practice, split year treatment involves eight distinct "cases", each with precise conditions, and the interaction between them, the statutory residence test (SRT), and the remittance basis creates significant complexity. This guide explains how split year treatment works, which case applies to your circumstances, and the common mistakes that lead to over- or under-payment of UK tax.

Why Split Year Treatment Matters

Without split year treatment, you would either be UK-resident for an entire tax year (and taxed on worldwide income from 6 April to 5 April) or non-resident for the entire year (and taxed only on UK-source income). Neither outcome is fair when you genuinely left or arrived during the year.

Consider a taxpayer who leaves the UK on 1 October 2025 and establishes genuine tax residence in Cyprus from that date. Without split year treatment, they would either be UK-resident for the whole of 2025–26 (paying UK tax on worldwide income including their Cyprus rental income from October onwards) or non-resident for the whole year (potentially missing out on UK personal allowance and creating anomalies with UK income received before departure).

Split year treatment solves this by designating a specific date as the boundary. Income and gains arising after the split date are treated as non-resident for UK tax purposes. This can save a very significant amount of tax — particularly in years when a large capital gain, bonus, or business disposal is received.

The Eight Cases of Split Year Treatment

HMRC's split year rules contain eight cases. Cases 1 to 3 apply to individuals leaving the UK; cases 4 to 8 apply to those arriving. Only one case needs to be satisfied, and where more than one applies, the case giving the earliest split date (for arrivals) or latest split date (for departures) typically governs.

Case 1: Starting full-time work overseas

You leave the UK to work full-time overseas (broadly defined as working at least 35 hours per week on average, with no more than 30 UK workdays). You must have no UK home from departure, or if you have a UK home, you spend fewer than 91 days in it during the overseas part of the year. The split date is the day you start the overseas work.

Case 2: The partner of someone in Case 1

You accompany or join a spouse or civil partner who qualifies under Case 1. You must have been resident in the prior year, your only UK ties are accommodation and the partner, and you are present in the UK for fewer than 91 days in the overseas part of the year.

Case 3: Ceasing to have a UK home

You are resident under the SRT for the whole year (or for the UK part), but you cease to have a UK home during the year. After ceasing to have a UK home, you are present in the UK for fewer than 16 days in any 365-day period, and you either acquire an overseas home or have no home anywhere. The split date is when you last had a UK home.

Case 4: Starting to have a UK home

You arrive in the UK and establish a UK home for the first time. Prior to your arrival, you had no UK home. You must be UK-resident in the year of arrival (or in a subsequent year) and resident for the overseas part. The split date is when you first have a UK home.

Case 5: Starting full-time work in the UK

You arrive in the UK and begin full-time work here. You were not UK-resident in the previous year and had no UK home before starting. The split date is the day you begin the UK work.

Case 6: Ceasing full-time overseas work

You were working full-time overseas and cease to do so, returning to UK residence. The overseas period is the part before you ceased full-time overseas work.

Case 7: Partner of someone in Case 6

The same conditions as Case 2 but for an arriving partner.

Case 8: Starting to have a UK home for the first time

A catch-all for individuals who were not UK-resident in either of the two preceding years and have no UK ties other than a UK home acquired during the year. The split date is when the UK home is first acquired.

Determining Your Split Date

The split date is critical because it determines which income and gains fall within the UK-resident part of the year and which fall in the non-resident part.

For leavers (Cases 1–3), the resident part is the period from 6 April to the split date. For arrivers (Cases 4–8), the resident part is from the split date to 5 April. In each case, income and gains in the non-resident part are assessed as if you were non-resident throughout that period — meaning only UK-source income and UK property gains are within scope.

This matters enormously for:

• Employment bonuses received in the non-resident part: if a bonus relates to services performed globally, apportionment may be required, but bonuses earned and received entirely in the non-resident part are generally outside the scope of UK tax.
• Capital gains on foreign assets: a gain realised after the split date (for a leaver) or before (for an arriver) is treated as arising in the non-resident period and is not subject to UK CGT (subject to temporary non-residence rules — see the separate guide on this).
• Foreign investment income: dividends and interest from overseas sources received after the split date are treated as arising in the non-resident period and are not subject to UK income tax (unless remitted, if the remittance basis applies).
• UK rental income: this remains UK-source income regardless of the split — you pay UK tax on it throughout the year.

Claiming Split Year Treatment on Your Return

Split year treatment is claimed on the SA109 supplementary page of your self-assessment return. You must state which case applies, specify the split date, and declare income separately for each part of the year.

This cannot be done using HMRC's free online filing service — the SA109 requires either paper filing or third-party software. It is one of the most common errors made by expats who attempt to file without professional help.

You should retain the supporting documents that establish your case:

• For Case 1: employment contract, start date, work diary showing overseas days
• For Case 3: evidence of disposal or vacation of UK home (tenancy surrender, estate agent correspondence, sale completion)
• For Cases 4 and 5: tenancy agreement or purchase completion for UK home, UK employment start date

HMRC can challenge the claimed case and split date if records are insufficient.

Interaction with the Remittance Basis

For individuals who were formerly taxed on the remittance basis (broadly, those who were non-UK domiciled), the interaction with split year treatment adds another layer of complexity.

In a split year, the remittance basis can only apply during the UK-resident part of the year. Foreign income and gains arising in the non-resident part are outside the UK tax net entirely (not merely deferred under the remittance basis). Income arising in the overseas part that is remitted to the UK during the UK-resident part of the same year is generally not taxable — the remittance rules typically apply only to income or gains that arose in a UK-resident year.

This creates planning opportunities. An individual departing the UK who anticipates a large foreign gain should consider the split date carefully and, if possible, delay the gain until after the split date. Equally, an individual returning to the UK who has unremitted foreign income may wish to consider remitting before returning to the UK — in the overseas period — rather than during the UK-resident period.

Note that the former non-domicile regime underwent significant reform from April 2025. If you were previously taxed on the remittance basis, you should take specific advice on how the new Foreign Income and Gains (FIG) regime interacts with your split year position.

Common Mistakes in Split Year Claims

Claiming the wrong case. Where multiple cases potentially apply, choosing the wrong one can produce a less favourable split date. A tax adviser will identify all applicable cases and select the most beneficial.

Using the wrong split date. The split date is often a specific day — not the month or approximate period. Using the wrong date (even by a day) can bring income within the wrong period.

Failing to claim at all. Some expats simply file as fully resident or fully non-resident for the year they leave or arrive. Filing as fully resident means paying UK tax on worldwide income for the entire year unnecessarily. Filing as fully non-resident (when you were actually resident for part of the year) can underpay UK tax and trigger an HMRC enquiry.

Ignoring temporary non-residence. Split year treatment and the temporary non-residence rules are related but distinct. If you leave the UK and return within five years, certain capital gains and income that arose in the overseas period may be brought back into the UK tax net in the year of return. This anti-avoidance rule applies regardless of whether you properly claimed split year treatment.

Not keeping contemporaneous records. The conditions for each case must be met precisely, and the evidence supporting them must be held. Missing records discovered during an HMRC enquiry can make it impossible to defend a split year claim years later.

Practical Steps When Leaving or Arriving

If you are leaving the UK:

1. Identify which Case of split year treatment you will likely qualify for
2. Note your intended split date and what steps are required to achieve it (e.g., ceasing UK home, starting overseas work)
3. Consider the timing of planned disposals, bonuses, or income events relative to the split date
4. File P85 with HMRC to notify them of your departure
5. Retain all relevant documentation
6. File the SA109 correctly for the year of departure

If you are arriving in the UK:

1. Consider when you will first have a UK home or start UK work — this determines your split date
2. Manage remittances of previously unremitted foreign income carefully in the year of arrival
3. Notify HMRC of your arrival if you have a UK tax obligation
4. Seek advice before arriving if you anticipate complex affairs

How Global Investments Can Help

The year in which you leave or arrive in the UK is often one of the most financially consequential of your life. Getting the split year treatment right can mean the difference between a clean, compliant departure and years of HMRC enquiries and retrospective tax demands.

Global Investments works with clients across all stages of their international journey. We can connect you with specialist UK tax advisers experienced in split year treatment and SRT analysis, and ensure your financial arrangements support your intended residence position. Contact our team for a confidential initial conversation.

This article is for general information only. Tax rules are complex, change frequently, and depend on individual circumstances. Nothing here constitutes personal tax advice. Always seek independent professional guidance tailored to your situation. Investments can fall as well as rise in value.