Split-Year Treatment When Leaving the UK: All 8 Cases Explained

What Is Split-Year Treatment?

When a UK tax resident leaves the United Kingdom part-way through a tax year, or arrives in the UK part-way through a year, split-year treatment can divide that tax year into two parts: a "UK part" during which the individual is treated as UK resident and taxed on worldwide income and gains, and an "overseas part" during which they are treated as non-resident and taxed only on UK-source income.

Split-year treatment is set out in Part 3 of Schedule 45 to the Finance Act 2013. It is an automatic consequence of meeting the conditions — it is not discretionary — but it must be claimed on the self-assessment return for the relevant year. It does not override the Statutory Residence Test determination itself: an individual who is UK resident for the full year under the SRT may still have a split year for income tax and CGT purposes if they meet one of the eight cases.

There are eight cases in total. Cases 1, 2, and 3 are for individuals who leave the UK during the tax year. Cases 4 through 8 are for individuals who arrive in the UK during the tax year.

This article addresses the departure cases in detail and provides an overview of the arrival cases, with particular focus on Cases 1, 4, and 8, which are the most commonly relevant.

Case 1: Starting Full-Time Work Overseas

Case 1 is the most commonly used departure case and is relevant to employees and self-employed individuals who leave the UK to work overseas.

Conditions for Case 1

The individual must:

1. Not be UK resident in the following tax year (under the SRT)
2. Leave the UK mid-year and take up full-time overseas work
3. Have no more than a limited number of UK workdays after departure
4. Spend fewer than a specified number of days in the UK after the departure date

The "full-time overseas work" standard is the same as for Automatic Overseas Test 2: an average of 35 hours per week over the overseas work period, calculated using the paragraph 9 formula in Schedule 45. In the period from departure to the end of the tax year, the individual must work overseas full-time, spend fewer than 91 days in the UK, and work fewer than 31 days in the UK.

If these conditions are met, the tax year is split at the "relevant date" — the day on which the individual begins their overseas employment. Income and gains arising in the overseas part of the year are outside the scope of UK income tax and CGT (subject to the UK-source income rules that always apply to non-residents).

Case 1 in Practice

An employee who leaves the UK on 1 September 2025 to take up a full-time role in Singapore is potentially within Case 1 for 2025/26. The UK part runs from 6 April 2025 to 31 August 2025. The overseas part runs from 1 September 2025 to 5 April 2026.

If the employee receives a bonus in October 2025 from their UK employer for the period before departure, that bonus will generally be treated as arising in the UK part of the year (since it relates to UK employment), even if paid after the departure date. Careful advice is needed on the timing of bonus payments.

Case 2: Accompanying a Partner Overseas (Who Meets Case 1)

Case 2 applies to the partner of an individual who qualifies under Case 1. The accompanying partner (who is themselves not working) can benefit from split-year treatment provided they:

1. Are resident in the UK for the year (under SRT)
2. Are not resident in the following year
3. Leave the UK to join a partner who is undertaking full-time overseas work within the meaning of Case 1
4. Spend fewer than 91 days in the UK and fewer than 91 days working in the UK after the departure date

Case 2 is often overlooked when advising families. A spouse who has no work income but has investment income or rental income can significantly reduce their UK tax liability by ensuring their own split-year treatment is properly claimed.

Case 3: Ceasing to Have a UK Home

Case 3 applies where an individual leaves the UK and ceases to have a UK home, without necessarily having full-time overseas employment. It is most relevant to retirees or those living on investment income who are leaving the UK permanently.

Conditions:

1. At the start of the tax year, the individual has a UK home
2. Before the end of the tax year, they cease to have a UK home
3. After ceasing to have a UK home, they spend fewer than 16 days in the UK for the remainder of the year
4. If they have an overseas home, they are present at it for at least 30 days in the part of the year after losing the UK home

The "ceasing to have a UK home" condition is a fact-based test. HMRC takes the view that a property that is let to a third party on arm's length commercial terms, where the individual has no right to occupy it, is no longer a "home" for SRT purposes. Accordingly, a leaver who rents out their UK property before departing may be able to use Case 3 from the date the tenancy begins.

Cases 4–8: Arrival Cases Overview

Case 4: Accompanying Partner Arriving in the UK

Case 4 mirrors Case 2 for arrivals. A non-working partner who arrives in the UK to join a spouse or civil partner who is working full-time in the UK can claim split-year treatment from the date of arrival.

Case 5: Starting Full-Time UK Work (Arrivers)

Case 5 applies to individuals who begin full-time UK employment mid-year. The individual is treated as non-resident for the period before they begin UK work.

Case 6: Ceasing Full-Time Overseas Work (Return to UK)

Case 6 applies to individuals who return to the UK having been working full-time overseas. The split occurs at the point they cease full-time overseas work.

Case 7: Acquiring a UK Home

Case 7 applies where an individual acquires a UK home mid-year and has no UK home at the start of the year. It is the arrival mirror of Case 3.

Case 8: Partner of Person Starting Full-Time Overseas Work (Arrival Variant)

Case 8 applies to the partner of an individual who starts full-time overseas work mid-year. The partner (who is arriving in the UK) can claim split-year treatment from the point the couple arrive together, provided certain conditions are met. This is a narrow but important case for international families with complex movement patterns.

Priority Rules: Which Case Applies?

An individual may satisfy the conditions of more than one case. In that situation, the rules specify priority: for departure cases, Case 1 takes priority over Cases 2 and 3. Case 2 takes priority over Case 3. For arrival cases, Cases 4-8 apply in numerical order of priority.

The priority rules matter because different cases produce different split dates. An individual who both acquires a UK home and starts full-time UK work on the same day will have the same split date regardless of which case applies, but an individual who starts work before acquiring a home — or vice versa — will have different split dates under different cases.

Interaction with Capital Gains Tax

Split-year treatment for CGT purposes mirrors the income tax treatment. Disposals made in the overseas part of the year are outside the scope of UK CGT (subject to the UK residential property charge and the post-April 2019 commercial property rules, which apply to non-residents regardless of split-year status).

This creates a significant planning opportunity for leavers with unrealised capital gains in non-UK assets. An individual who departs on 1 July 2025 under Case 1 can sell overseas shares in February 2026 without UK CGT liability, even though they remain "UK resident" for the full 2025/26 tax year under the SRT. The overseas part treatment means the gain falls outside UK CGT.

However, the temporary non-residence rules under section 10A TCGA 1992 apply to catch certain gains if the individual returns to the UK within five tax years of departure. Gains on pre-departure assets that are disposed of in the overseas part of a split year, or in subsequent non-residence years, may be taxed on the year of return if the individual re-establishes UK residence before five complete tax years have elapsed.

Case	Who It Applies To	Split Date
Case 1	Employee/self-employed going overseas	Date full-time overseas work begins
Case 2	Non-working partner of Case 1 individual	Date of departure to join partner
Case 3	Anyone ceasing to have a UK home	Date UK home ceases
Case 4	Non-working partner of UK FT worker	Date of arrival in UK
Case 5	Individual starting full-time UK work	Date UK work begins
Case 6	Individual returning from full-time overseas work	Date overseas work ceases
Case 7	Individual acquiring UK home	Date UK home acquired
Case 8	Partner of person starting overseas work	Date couple arrive at overseas location

Common Mistakes

Assuming split-year is automatic: Split-year treatment requires a claim on the tax return. If the return is filed without the claim, HMRC will treat the year as a full residence year unless an amendment is submitted within the four-year amendment window.

Failing the overseas work test: Many individuals who believe they qualify for Case 1 fail the 35-hour-per-week average test because they take extended holiday periods or have gaps between roles. The calculation is mechanical and unforgiving.

Ignoring UK workdays: A single month of UK work after departure can cause failure of the 31-day UK workday test, collapsing the Case 1 claim for the entire year.

Missing the 16-day post-Case 3 threshold: An individual who sells their UK home and lets the proceeds in a UK bank account, then comes back to the UK for Christmas and stays 17 days, fails Case 3 for the year.

Confusing the overseas part with non-residence: Income that has a UK source — UK property rental, UK employment income for duties performed in the UK — is always taxable in the UK regardless of split-year treatment. Split-year only shelters non-UK-source income and gains.

HPT Group works with individuals at the pre-departure planning stage to ensure split-year conditions are documented and maintained throughout the transition year. The planning required to protect the Case 1 overseas part — from managing UK workday counts to structuring bonus timing — is detailed and time-sensitive. Visit our international tax services page to understand how we approach departure planning, or apply for a consultation ahead of a planned move.