expat network

Can I Use Split Year To Reduce My Tax Liability On Return To The UK?

We are returning to the UK after 20 years in Dubai.  My husband has taken redundancy and we were hoping that his salary plus end of service benefit was going to be received and transferred to the UK before our return, unfortunately due to the slow cancellation of Visas etc this is looking less likely.  He has secured new employment in UK starting 12/3, not sure how all this will affect our tax implications. Will we be liable for split year taxation or for whole of tax year

Trevor Wilkes, Principal of Trewtax Services responded as follows:


As you may be aware, liability to UK tax whilst you are employed overseas is driven by your residence status and the Statutory Residence Test. As a result, you will either be non-resident or resident for a particular tax year. For the years of departure or arrival you will be resident unless you are able to meet the strict criteria which enables you to split a tax year into non-resident and resident parts. This will therefore have a direct bearing on liability in respect of income tax and I appreciate your concern is in respect of your husband’s employment income package.

This is a particularly complex aspect and not something which can be determined from the details provided. Consequently, your husband’s tax position should be reviewed in depth and as quickly as possible bearing in mind his imminent return to the UK within the coming 2 weeks.