HMRC Split-Year Treatment Guidance

(UNITED KINGDOM) — HMRC guidance sets out that people who move into or out of Britain part-way through a tax year can split that year into a UK part and an overseas part, but only if they first count as UK resident for that year under the Statutory Residence Test and then fit one of eight statutory cases.

The rule, known as UK Split-Year Treatment, decides whether foreign salary, dividends, rental income, business profits and overseas gains fall inside the UK tax charge for the whole year or only for part of it. Britain’s tax year runs from April 6 to April 5.

Residence Test Comes First

Without split-year treatment, a person who becomes UK resident under the Statutory Residence Test can be treated as resident for the whole tax year. HMRC says that where someone arrives in or leaves the UK during the year, the year may instead be divided into a UK part, taxed as resident, and an overseas part, taxed generally as non-resident for most purposes.

That result does not follow automatically from a flight, visa, job start or lease. HMRC says split-year treatment applies only where the person is UK resident for the year and meets one of the specific split-year cases; if the person is non-UK resident for the whole year, there is no resident year to split.

Residence comes first. HMRC guidance in RDR3 says a person may be non-UK resident under automatic overseas tests, UK resident under automatic UK tests, or resident or non-resident under the sufficient ties test.

One automatic UK test treats a person as resident if they spend 183 days or more in the UK in the tax year. Automatic overseas tests include cases where a previously UK-resident person spends fewer than 16 days in the UK, or where someone not resident in any of the previous three tax years spends fewer than 46 days in the UK.

If those tests do not settle the answer, the sufficient ties test looks at family, accommodation, work, a 90-day history and, for some people, a country tie. HMRC says the more UK ties a person has, the fewer days they can spend in the country before becoming resident.

Eight Split-Year Cases

Only after that analysis does the split-year question begin. HMRC says there are eight split-year cases, with Cases 1 to 3 covering departures from the UK and Cases 4 to 8 covering arrivals.

Departure cases broadly cover starting full-time work overseas, accompanying or joining a partner who starts full-time work overseas, and ceasing to have a home in the UK. Arrival cases broadly cover starting to have an only home in the UK, starting full-time work in the UK, ceasing full-time work overseas, being the partner of someone ceasing full-time work overseas, and starting to have a home in the UK.

Where more than one case applies, priority ordering rules determine which case governs and what the split date is. HMRC says that date comes from the statutory case, not simply from the date of a flight, visa, job offer or tenancy.

Departure and Arrival Scenarios

That distinction often matters most on departure. A person can leave Britain and still remain UK resident for the tax year, making split-year treatment the step that limits UK taxation for the overseas part.

HMRC gives a Case 3 example involving someone who left the UK to live abroad and ceased to have a UK home. In that example, the overseas part began on the day the taxpayer no longer had a home in the UK, after she moved out of her UK home, later flew to the UAE, had no close family in the UK and did not return during the rest of the tax year.

Records become central in those cases. Home sale papers or tenancy end documents, employment start dates abroad, travel dates, UK workdays, overseas residence evidence and family movement can all shape the result.

Arrivals carry the same level of exposure, especially where large sums arise before the move. Split-year treatment can keep pre-arrival foreign income and gains outside the UK charge for most purposes if the person is resident for the tax year but qualifies for one of the arrival cases.

That can affect salary earned abroad, foreign share sales, dividends, rental income and bonuses received before the UK part begins. HMRC’s framework does not let taxpayers choose the split date freely, and the date does not always match the first day in Britain or the first day of work.

FIG Regime and Capital Gains

The rules gained extra weight after the UK switched to the residence-based Foreign Income and Gains regime. From April 6, 2025, the old remittance basis ended and the FIG regime became relevant for qualifying new residents.

That change leaves many new arrivals with two separate tax questions in the same year. One is whether UK Split-Year Treatment applies on arrival; the other is whether FIG relief should be claimed for qualifying foreign income and gains during eligible UK-resident years.

The two analyses do different jobs. Split-year treatment allocates the year between a UK part and an overseas part, while the FIG regime can provide relief for qualifying foreign income and gains during the resident period.

Capital gains sit inside the split-year framework too. The rules apply to capital gains tax as well as income tax, which matters for people selling foreign shares, overseas property, crypto or business interests around the time of a move.

A disposal before arrival may fall in the overseas part; a disposal after departure may do the same. HMRC’s position still requires checks on temporary non-residence and on cases where UK rules tax certain gains even while a person is non-resident, including some UK property disposals.

Employment Income and Practical Application

Employment income often becomes the most detailed part of the file because workdays can fall on both sides of the split. HMRC’s RDR1 guidance says that where a year is split, earnings attributable to the overseas part are broadly not chargeable if they relate to overseas work.

That makes day counts and payroll records more than administrative detail. Contracts, assignment letters, UK and overseas workday calendars, payslips and bonus allocations can all affect both residence and income allocation, especially for remote workers and internationally mobile executives.

Split-year treatment also stops at the UK’s domestic tax rules. HMRC says it does not decide whether another country also treats the person as resident or whether a double taxation agreement changes the position.

Someone moving between Britain and India, the United States, Canada, the UAE, Singapore, Australia or an EU country can still face residence questions in both places. Treaty tie-breaker rules or foreign tax credit analysis may still be needed even where the split-year rules reduce the UK charge on foreign income and gains.

Claims and Common Mistakes

Claims usually go through the Self Assessment residence pages, commonly SA109. HMRC updated the SA109 page on April 6, 2026 with forms and notes for the 2025 to 2026 tax year.

The return identifies the residence position, the split-year basis and the relevant dates. Evidence can include passport stamps, boarding passes, UK and overseas lease agreements, home sale or termination documents, workday calendars, payslips, school records, partner travel records, utility bills and bank statements showing where a home was maintained.

• People often assume the tax year splits automatically when they move
• Use the flight date as the split date
• Ignore UK workdays
• Overlook capital gains around an arrival or departure
• Treat split-year treatment as interchangeable with treaty relief

Another trap sits in the following tax year. Some split-year cases depend on later residence or non-residence conditions, meaning a return filed on the basis that split-year treatment applies may need amendment if those later conditions are not met.

Practical Examples

The timing issues can be sharp in ordinary cases. A software engineer who moves from India to the UK on August 1, 2026, starts full-time work in London, rents a flat and becomes UK resident under the Statutory Residence Test would need to check which arrival case applies and from what date the UK part starts.

A UK resident who leaves for Dubai on September 15, 2026, ends a UK tenancy, starts overseas employment and does not return during the rest of the tax year would need to test the departure cases, including full-time overseas work and ceasing to have a UK home. A family that leaves in stages, with one spouse departing in June and the other spouse and children leaving in November, can face a more complicated analysis because partner, home and day-count rules all feed into the result.

Across all of those scenarios, HMRC guidance points back to the same sequence: determine residence first, then test the split-year cases, then match income, gains and workdays to the correct part of the year. In cross-border tax, a few days, one lease end date or the loss of a UK home can change the result.