Understanding the Split Year Basis: What to Know When Leaving the UK
Split year treatment applies to individuals who move into or out of the UK partway through a tax year. The tax year in the UK runs from April 6 to April 5 the following year.
The split year treatment allows the tax year to be divided into a UK part and an overseas part, ensuring that only UK income and gains are taxed during the UK part.
- The split year basis (SYT) applies automatically if conditions are satisfied; there is no claim to be made.
It is not possible to disapply the SYT if an individual is non-UK resident for the tax year under the automatic tests or sufficient ties tests:
- The SYT cannot apply to that year
- The individual is non-UK resident for the whole year.
Accordingly, for the SYT to apply, the individual must be UK resident in the tax year under the automatic tests or the sufficient ties tests.
UK Residency Test
Look at the different UK residency tests you can take:
Automatic UK residency tests:
An individual is automatically a UK resident if that individual has been in the UK for at least:
- 183 days in the tax year, or
- 30 days in the tax year, and the individual’s only home is in the UK, or
- 365 days continuously working full time, some of which fall in the tax year.
If the individual does not satisfy any of the automatic tests, the tax status is determined by:
- how many of the five ‘sufficient ties tests’ are satisfied, and
- the number of days spent in the UK.
Sufficient ties tests:
To determine whether or not the individual is sufficiently connected to the UK to be considered a UK resident, HMRC will look at the following five ties:
This tie with the UK exists if the individual:
Family has close family (a spouse or civil partner or minor children) in the UK that are UK resident.
Accommodation has a house in the UK which is made use of during the tax year and is available for at least 91 consecutive days during the tax year.
Work does substantive work in the UK (i.e. at least 40 days).
Days in UK has spent more than 90 days in the UK in either, or both, of the previous two tax years.
Country Spends more time in the UK than in any other country in the tax year.
Note that for an individual leaving the UK (previously resident) i.e. UK resident for one or more of the previous three tax years: All five ties are relevant to decide the tax status.
Days in the UK
- Less than 16: Automatically not resident
- 16 to 45: Resident if 4 UK ties (or more)
- 46 to 90: Resident if 3 UK ties (or more)
- 91 to 120: Resident if 2 UK ties (or more)
- 121 to 182: Resident if 1 UK tie (or more)
- 183 or more: Automatically resident
SYT Applies in the Current Tax Year if the Individual
- Is a UK resident in the previous year, and
- Is a UK resident in the current tax year, and
- Is not a UK resident in the following year, and
- Leaves the UK partway through the current tax year for one of three reasons below.
1. Begins working abroad
Full time.
Does not spend more than a permitted number of days in the UK after departure (< 91 days per tax year, reduced proportionately in the year of departure).
Overseas part starts from the date overseas work starts.
2. Accompanies or later joins a partner abroad to continue to live with that partner
As the partner leaves the UK and satisfies the full time working abroad situation 1 above in the current year or the previous year provided he/she:
Does not spend more than a permitted number of days in the UK after departure (< 91 days per tax year, reduced proportionately in the year of departure).
The partner is a spouse, civil partner, or person with whom the individual has lived as if married or civil partner at some point during the current or previous tax year.
Has no home in the UK or, if does, spends the greater part of their time in an overseas home.
Overseas part starts from their partner starts overseas work or he/she joins partner.
3. Ceases to have any UK home
After ceasing to have a UK home, spends minimal time in the UK (< 16 days).
Establishes ties with the overseas country (e.g. buys a home abroad, becomes resident in an overseas country, spends more than six months in the overseas country).
Note: Where the SYT can apply under more than one of the above situations, priority is given in the order above (i.e. Situation 1, 2, and then 3).
Steps to Take When Leaving the UK
Step 1: Complete and Submit the P85 Form: This form helps HMRC to process any tax refund you may be due and informs them of your change in circumstances.
Step 2: Check Your Residency Status: Use HMRC’s tools and guidelines to determine your residency status for the tax year.
Step 3: Update Your Address: Ensure HMRC has your up-to-date overseas address to maintain correspondence.
Examples
Sarah has been living in the UK since birth and is a UK resident for tax purposes. She has worked in the publishing industry for four years but left her job to take up a two-year contract as a lecturer in Dubai. She started working in Dubai on 1 November 2023, one week after she moved there and has moved into a company-provided flat for the duration of her contract. She returns to visit her family in the UK over the New Year for two weeks and does not work while she is there. Sarah continues working in Dubai throughout the tax year 2024/25, only returning to the UK for two weeks in the summer.
Answer - Sarah will be taxed on a split year basis for the tax year 2023/24 because:
she was a UK resident in the tax years 2022/23 and 2023/24, as she was in the UK for at least 183 days,
she is not a UK resident for the tax year 2024/25,
she leaves the UK during the tax year 2023/24 to begin working abroad from 1 November 2023 until 5 April 2024:
Works full-time in Dubai or spends only 14 days in the UK, which is less than the permitted number of days.
For the tax year 2023/24, the year will be split as follows:
UK part = 6 April 2023 to 31 October 2023
Overseas part = 1 November 2023 to 5 April 2024
Now, Assume that Sarah completes her contract in Dubai on 30 November 2025 and immediately returns to the UK, moving back into her home. She starts full-time work for a UK publishing company on 1 December 2025. Sarah owns a villa in Italy that generates a rental income of £12,000 per year. During her time in Dubai, she lets her home in the UK for £15,000 per year.
Reason for split year basis Helen will be taxed on a split year basis for the tax year 2025/26 because:
she is not a UK resident for the tax year 2024/25
she is a UK resident for the tax year 2025/26 (as she carries out full time work in the UK during a 365-day period, some of which falls within the tax year)
she ceases working abroad and returns to the UK, having worked full time overseas
she is a resident in the UK for the following tax year (2026/27).
For 2025/26, the year will be split as follows:
Overseas part = 6 April 2025 to 30 November 2025
UK part = 1 December 2025 to 5 April 2026.
Basis of Assessment Whilst in Dubai
Tax Year 2023/24
Status: Resident and Domiciled in UK until 31 October 2023; Non-Resident but Domiciled from 1 November 2023
Tax:
- Worldwide income: taxable
- UK income: taxable
- Overseas income: exempt
Tax Year 2024/25
Status: Non-Resident but Domiciled in UK for the whole year
Tax:
- UK income: taxable
- Overseas income: exempt
Tax Year 2025/26
Status: Non-Resident but Domiciled until 30 November 2025; Resident and Domiciled from 1 December 2025
Tax:
- UK income: taxable
- Overseas income: exempt
- Worldwide income: taxable