Split-Year Treatment: Save Tax When Moving to the UK

Moving to the UK is exciting, new opportunities, new experiences, and (let's be honest) a fair bit of paperwork. But here's a question that catches many new arrivals off guard: do you really need to pay UK tax on your worldwide income for the entire tax year, even if you only arrived in October?

The answer, thankfully, is no. Split-year treatment is one of the most valuable tax reliefs available to individuals relocating to the UK, and yet it remains one of the least understood. If you qualify, it can save you thousands of pounds by ensuring you only pay UK tax from the date you actually arrive: not from the preceding 6 April.

In this guide, we'll walk you through exactly what split-year treatment is, how the Statutory Residence Test (SRT) determines your eligibility, and how to claim it correctly on your tax return using the SA109 form. We'll also explain how it connects to the new FIG (Foreign Income and Gains) scheme: a game-changer for new arrivals in 2025 and beyond.

What Is Split-Year Treatment?

Put simply, split-year treatment allows you to divide the UK tax year into two distinct parts:

• The overseas part: From 6 April until the day before your qualifying arrival. During this period, you are treated as non-UK resident and taxed only on UK-sourced income.
• The UK part: From your arrival date onwards. During this period, you are treated as UK resident and taxed on your worldwide income and gains.

This is not a choice you make: it is an automatic entitlement if your circumstances meet specific legal criteria set out in the Statutory Residence Test. You cannot simply elect for split-year treatment because it suits you; HMRC will only accept it if you genuinely qualify.

The benefit? You avoid being taxed twice on the same income. Without split-year treatment, you could find yourself paying UK tax on foreign earnings you received before you even set foot in the country.
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Understanding the Statutory Residence Test (SRT)

Before you can access split-year treatment, you must first be classified as UK tax resident for the year under the Statutory Residence Test. This might sound counterintuitive: why do you need to be resident to claim a relief that treats part of the year as non-resident?

The logic is straightforward: split-year treatment is a modification of your residence status, not an alternative to it. You are resident for the year, but the SRT allows certain circumstances where that residence is "split" for tax purposes.

The SRT test itself involves three main components:

• The Automatic Overseas Tests: If you meet any of these, you are automatically non-UK resident for the year (and split-year treatment becomes irrelevant).
• The Automatic UK Tests: If you meet any of these, you are automatically UK resident.
• The Sufficient Ties Test: If neither automatic test applies, your residence is determined by counting your UK ties (such as family, accommodation, work, and previous residence) against your days spent in the UK.

For a deeper dive into how the SRT works, take a look at our comprehensive guide on understanding the UK's Statutory Residence Test.

The Three Arrival Cases: Which One Applies to You?

Split-year treatment for arrivals usually falls under three specific "cases" defined by HMRC. You must satisfy all the conditions of at least one case to qualify. Let's break them down.

Case 4: Starting to Have a UK Home

This case applies if you did not have a home in the UK at the start of the tax year, but you acquire one during the year and it becomes your only home. To qualify:

• You must have been non-UK resident in the previous tax year.
• You must have no UK home at the start of the tax year (or, if you did, you must also have had an overseas home where you spent more time).
• From the date you acquire your UK home, you must have sufficient UK presence and the UK home must be your only home.
• You must remain UK resident in the following tax year.
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Case 5: Starting Full-Time UK Work

This case is designed for individuals who move to the UK to take up full-time employment. To qualify:

• You must start full-time work in the UK (defined as 35+ hours per week on average).
• You must have been non-UK resident in the previous tax year.
• You must not have any "significant breaks" from UK work during the period from your start date to the end of the tax year.
• In the overseas part of the year (before starting UK work), you must not spend more than the permitted number of days in the UK.
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Case 6: Ceasing Full-Time Overseas Work
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If you were working full-time overseas and return to the UK when that employment ends, Case 6 may apply. The conditions include:

• You must have been working full-time overseas at the start of the tax year.
• You must cease that overseas employment during the tax year.
• You must become UK resident as a result of returning.
• You must have been non-UK resident in the previous tax year.

Note that each case has detailed sub-conditions, and missing even one can disqualify you entirely. If you're unsure which case applies to your situation, we recommend seeking professional advice before filing your return.
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The Benefits: Why Split-Year Treatment Matters

The primary benefit of split-year treatment is straightforward: you avoid double taxation.

Without this relief, you would be taxed as a UK resident on your worldwide income for the entire tax year: including income earned abroad before you arrived. This could mean paying UK tax on:

• Salary earned while still employed overseas
• Rental income from foreign properties
• Investment gains realised before your move
• Pension contributions or withdrawals made abroad

With split-year treatment, that overseas income remains outside the UK tax net (though it may still be taxable in the country where it arose). You only become liable to UK tax on worldwide income from your actual arrival date. For high earners or those with significant overseas assets, this can result in tax savings of tens of thousands of pounds.

How to Claim Split-Year Treatment on Form SA109

Here's where many people trip up: split-year treatment is not automatically applied by HMRC. You must actively claim it on your Self Assessment tax return using supplementary form SA109 (Residence, Remittance Basis, etc.).

Here's a step-by-step guide:

Step 1: Determine Your Residence Status
Complete the residence section of the SA109 to confirm you are UK resident for the tax year under the SRT. You'll need to answer questions about your day count, ties, and automatic tests.

Step 2: Indicate You Are Claiming Split-Year Treatment
There is a specific section on the SA109 asking whether you wish to claim split-year treatment. Tick "Yes" and specify which case (4, 5, or 6) applies to your circumstances.

Step 3: Declare Your Split Date
You must state the exact date from which your UK part begins. This is determined by your circumstances (e.g., the date you acquired your UK home, started UK employment, or ceased overseas employment).

Step 4: Report Income Correctly
On your main tax return (SA100) and any supplementary pages, ensure you only declare worldwide income for the UK part of the year. Income arising during the overseas part should be excluded from your UK return (unless it is UK-sourced).

Step 5: Keep Evidence
HMRC may enquire into your claim. Retain documentation supporting your split date, such as flight records, employment contracts, tenancy agreements, and evidence of your overseas home.

For more guidance on filing UK tax returns with foreign income, see our article on whether you need to file a UK tax return if you have foreign income.
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How Split-Year Treatment Links to the New FIG Scheme

If you're arriving in the UK in 2025 or later, you'll want to pay attention to the new FIG (Foreign Income and Gains) scheme. This regime, which replaces the old remittance basis for non-doms, allows qualifying new arrivals to exempt their foreign income and gains from UK tax for up to four years. Here's where it gets interesting: split-year treatment and the FIG scheme can work together.

If you qualify for split-year treatment, your UK tax liability begins from your arrival date. From that date, if you also meet the FIG scheme criteria, you can elect to keep your foreign income and gains outside the UK tax net.

This creates a powerful double benefit:

• Before arrival: No UK tax on worldwide income (split-year treatment).
• After arrival: Foreign income and gains remain UK tax-free under the FIG scheme (for up to four years).

For a full breakdown of how the FIG scheme works and whether you qualify, visit our FIG blog.

Common Mistakes to Avoid

Split-year treatment is valuable, but it's also easy to get wrong. Here are the pitfalls we see most often:

• Assuming it applies automatically: It doesn't. You must claim it on the SA109, and you must meet the conditions. If you fail to claim, HMRC will tax you as resident for the whole year.
• Miscounting UK days in the overseas part: Each arrival case has strict day limits. Exceeding them: even by one day: can disqualify you entirely.
• Not remaining UK resident the following year: Most arrival cases require you to be UK resident in the year after your move. If your plans change and you leave the UK, you may need to amend your earlier return.
• Confusing split-year with the remittance basis: These are separate reliefs. Split-year treatment determines when you become UK resident; the remittance basis (or now the FIG scheme) determines how your foreign income is taxed once you are resident.

Next Steps: Get Your UK Tax Residency Assessment Right

Split-year treatment can be the difference between a smooth transition to UK life and an unexpected five-figure tax bill. But qualifying requires careful planning, accurate record-keeping, and a solid understanding of the Statutory Residence Test.