Split Year Treatment under new SRT

Normally, if you are resident in the UK for any part of a tax year you will be taxed as a UK resident for the whole of the tax year. However, there are special rules which may apply to you if you either leave the UK to live or work abroad or come from abroad to live or work in the UK. These special rules split the tax year into a UK part, when you are taxed as a UK resident, and an overseas part, when you are taxes as a non-UK resident.

Before 6 April 2013, HMRC operated these special rules as a concession known as Extra Statutory Concession A11. After 5 April 2013, these special rules are contained in law, under the Statutory Residence Test ('SRT'). Once you have determined using the new SRT test that you are non-resident for part of the year you still need to find out what is the exact date where the status changes. As with the residence test, treatment is different whether you are a leaver or an arriver. Here are the rules for finding out that date:

Leavers

1 - starting full time work abroad
2 - partner of someone in case 1
3 - ceasing to have a home in the UK

Date decided by order of priority (1,2 and then 3)

Arrivers

4 - starting date to have a home in UK only
5 - starting full time work in the UK
6 - ceasing full time work abroad
7 - partner of person in case 6
8 - starting to have a home in the UK

Case 6 takes priority unless case 5 occurs before case 6, then case 5 takes priority over case 6. Case 7 then applies, then the earliest of case 4, 5 and 8.

As always when dealing with complex arrival cases, it may be important for mobile employees and their employers to seek professional advice to establish when residence is treated as starting and when withholding obligations arise on employment income. The rules are designed in a such a way such that an individual may be treated as resident or non-resident at a point which is different from when they arrive or leave the UK.