What is split-year treatment under the SRT?

Split-year treatment divides a tax year into a UK-resident part and a non-resident part, preventing a full year of UK tax when you arrive in or leave the UK mid-year. It applies in eight specific cases with detailed conditions. Split-year treatment allows a tax year to be split so that part of the year is treated as UK-resident and part as non-resident. This prevents an individual who arrives in or leaves the UK mid-year from being treated as UK resident for the entire year. Split-year treatment is available in eight specific 'cases' under the SRT: Departure cases (1-4): (1) Case 1 — leaving the UK to work full-time overseas. (2) Case 2 — leaving the UK to become non-resident. (3) Case 3 — leaving the UK to work full-time overseas with a partner. (4) Case 4 — ceasing to have a home in the UK. Arrival cases (5-8): (5) Case 5 — arriving in the UK to work full-time in the UK. (6) Case 6 — arriving in the UK with no home overseas. (7) Case 7 — arriving in the UK to work full-time in the UK with a partner. (8) Case 8 — starting to have a home in the UK. Each case has detailed conditions that must be met precisely. Relevant legislation: Finance Act 2013, Schedule 45, Sections 1004-1011 (split-year treatment cases). Example: An individual leaves the UK on 1 September to work full-time overseas. If they meet the conditions of Case 1 (leaving to work full-time overseas), the tax year is split: 6 April to 31 August is UK-resident, and 1 September to 5 April is non-resident. Foreign income earned after 1 September is not subject to UK tax. Common mistake: Assuming split-year treatment is automatic. It must be claimed on the self-assessment return, and the specific conditions of the relevant case must be met.

How do I qualify for split-year treatment when leaving the UK?

You must meet the conditions of one of the departure cases (Cases 1-4). The most common is Case 1: leaving to work full-time overseas, which requires working full-time overseas with limited UK workdays and no significant UK ties. To qualify for split-year treatment when leaving the UK, you must meet the conditions of one of the departure cases: (1) Case 1 — leaving to work full-time overseas: you must work full-time overseas, spend fewer than 46 days in the UK in the post-split period, and have no significant UK work or ties. (2) Case 2 — leaving to become non-resident: you must be non-resident in the following year and spend fewer than 46 days in the UK in the post-split period. (3) Case 3 — leaving to work full-time overseas with a partner: similar to Case 1 but with conditions relating to a partner. (4) Case 4 — ceasing to have a home in the UK: you must cease to have a home in the UK and meet other conditions. The most common departure case is Case 1 (leaving to work full-time overseas), which provides a clear set of conditions for split-year treatment. Relevant legislation: Finance Act 2013, Schedule 45, Sections 1004-1007 (departure cases). Example: An individual leaves the UK on 1 September 2025 to work full-time in Singapore. They spend fewer than 46 days in the UK between 1 September 2025 and 5 April 2026, and they work full-time overseas. They meet the conditions of Case 1, and the tax year is split: 6 April to 31 August is UK-resident, and 1 September to 5 April is non-resident. Common mistake: Spending too many days in the UK after the split date. The 46-day limit (for Cases 1 and 2) is strict, and exceeding it disqualifies the individual from split-year treatment.

How do I qualify for split-year treatment when arriving in the UK?

You must meet the conditions of one of the arrival cases (Cases 5-8). The most common is Case 5: arriving to work full-time in the UK, which requires working full-time in the UK and having no significant overseas ties. To qualify for split-year treatment when arriving in the UK, you must meet the conditions of one of the arrival cases: (5) Case 5 — arriving to work full-time in the UK: you must work full-time in the UK, have no significant overseas work, and meet other conditions. (6) Case 6 — arriving with no home overseas: you must have no home overseas and spend sufficient time in the UK. (7) Case 7 — arriving to work full-time in the UK with a partner: similar to Case 5 but with conditions relating to a partner. (8) Case 8 — starting to have a home in the UK: you must start to have a home in the UK and meet other conditions. The most common arrival case is Case 5 (arriving to work full-time in the UK), which provides a clear set of conditions for split-year treatment. Relevant legislation: Finance Act 2013, Schedule 45, Sections 1008-1011 (arrival cases). Example: An individual arrives in the UK on 1 October 2025 to work full-time in the UK. They meet the conditions of Case 5, and the tax year is split: 6 April to 30 September is non-resident, and 1 October to 5 April is UK-resident. Foreign income earned before 1 October is not subject to UK tax. Common mistake: Not meeting the full-time work requirement. Case 5 requires genuine full-time work in the UK — part-time work or occasional consulting does not qualify.

What is the effect of split-year treatment on foreign income?

Foreign income earned during the non-resident part of the year is not subject to UK tax. Foreign income earned during the resident part is subject to UK tax (subject to any FIG regime relief for new arrivals). The effect of split-year treatment depends on whether it is a departure or arrival case: (1) Departure cases — the pre-split period is UK-resident and the post-split period is non-resident. Foreign income earned after the split date is not subject to UK tax. UK income earned during the pre-split period is subject to UK tax as normal. (2) Arrival cases — the pre-split period is non-resident and the post-split period is UK-resident. Foreign income earned before the split date is not subject to UK tax. Foreign income earned after the split date is subject to UK tax (subject to any FIG regime relief for new arrivals). The split-year treatment can significantly reduce the UK tax liability in the year of arrival or departure, as foreign income earned during the non-resident part is outside the scope of UK tax. Relevant legislation: Finance Act 2013, Schedule 45, Section 1003 (effect of split-year treatment). Example: An individual arrives in the UK on 1 October 2025 (Case 5). They earn £100,000 of foreign income between 6 April and 30 September (non-resident period) and £50,000 between 1 October and 5 April (resident period). The £100,000 is not subject to UK tax. The £50,000 may be subject to UK tax, but if the individual qualifies for the FIG regime, it may be exempt. Common mistake: Assuming that all foreign income is exempt under split-year treatment. Only income earned during the non-resident part is exempt — income earned during the resident part is subject to UK tax (unless FIG relief applies).

Can I combine split-year treatment with the FIG regime?

Yes. Split-year treatment and the FIG regime can both apply in the year of arrival. Split-year determines the resident period, and the FIG regime provides relief on foreign income during the resident period. Split-year treatment and the FIG regime can both apply in the year of arrival. They serve different purposes: (1) Split-year treatment divides the tax year into non-resident and resident parts. Foreign income earned during the non-resident part is not subject to UK tax. (2) The FIG regime provides relief on foreign income and gains during the 4-year relief period (for new arrivals). Foreign income earned during the resident part is exempt if the FIG regime applies. The combination means that: (a) Foreign income earned before the split date is not subject to UK tax (split-year treatment). (b) Foreign income earned after the split date is exempt if the FIG regime applies (FIG relief). This can provide significant tax savings for new arrivals who qualify for both split-year treatment and the FIG regime. Relevant legislation: Finance Act 2013, Schedule 45 (split-year); Finance Act 2025 (FIG regime). Example: An individual arrives in the UK on 1 October 2025 (Case 5) and qualifies for the FIG regime. Foreign income earned before 1 October is not subject to UK tax (split-year treatment). Foreign income earned after 1 October is exempt under the FIG regime (4-year relief). Both reliefs apply, meaning no UK tax on foreign income for the entire tax year. Common mistake: Not claiming both split-year treatment and the FIG regime. Both reliefs must be claimed on the self-assessment return, and failing to claim either one can result in unnecessary UK tax.

International Tax › Residence

Split-Year Treatment Under the SRT

Split-year treatment divides the tax year into UK-resident and non-resident parts, preventing a full year of UK tax when you arrive or leave mid-year. Understand the 8 cases and how to claim.

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Split-year treatment allows a tax year to be divided into a UK-resident part and a non-resident part. This is crucial for individuals who arrive in or leave the UK during the tax year, as it prevents them from being treated as UK resident for the entire year. The rules are detailed in eight specific 'cases' under the SRT, each with its own conditions and requirements.

When Split-Year Applies

Split-year treatment is available in eight specific cases, grouped into departure cases (1-4) and arrival cases (5-8). Each case has detailed conditions that must be met precisely. The treatment divides the tax year at a specific date, so that the pre-split period is treated as UK-resident (for arrivals) or non-resident (for departures) and the post-split period is treated as the opposite.

Departure Cases (1-4)

The departure cases apply when an individual leaves the UK: (1) Case 1 — leaving to work full-time overseas. (2) Case 2 — leaving to become non-resident. (3) Case 3 — leaving to work full-time overseas with a partner. (4) Case 4 — ceasing to have a home in the UK. Each case has specific conditions about the individual's work, residence, and ties to the UK.

Arrival Cases (5-8)

The arrival cases apply when an individual arrives in the UK: (5) Case 5 — arriving to work full-time in the UK. (6) Case 6 — arriving with no home overseas. (7) Case 7 — arriving to work full-time in the UK with a partner. (8) Case 8 — starting to have a home in the UK. Each case has conditions about the individual's work, homes, and ties.

Effect of Split-Year

If split-year treatment applies, the tax year is divided at the split date. For departure cases, the pre-split period is UK-resident and the post-split period is non-resident (foreign income earned after the split is not subject to UK tax). For arrival cases, the pre-split period is non-resident and the post-split period is UK-resident (foreign income earned before the split is not subject to UK tax). Split-year treatment must be claimed on the self-assessment return.

Key Points

What You Need to Know

Split-year treatment divides the tax year into resident and non-resident parts
Eight specific cases apply — four for departures and four for arrivals
Each case has detailed conditions that must be met precisely
The treatment must be claimed on the self-assessment return
Split-year affects the taxation of foreign income and gains in the year of arrival or departure

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