Relocating to another country is often a mix of excitement and administrative chaos — new job, new culture, and, inevitably, new tax rules. Yet for many British expats, what they don’t realise is that the way they manage their departure from the UK could save them tens of thousands in taxes. This is precisely what happened in one real-life scenario — where Split-Year Tax Treatment legally reduced the individual’s UK tax bill by £31,000 after moving to Singapore.
This article breaks down exactly how this relief works, why it exists, who qualifies, and how others can use it to avoid paying unnecessary tax when moving abroad.
1. What Is Split-Year Tax Treatment?
The UK tax year runs from 6 April to 5 April, and by default, HMRC treats individuals as either:
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UK resident for the whole tax year, or
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Non-UK resident for the whole tax year
This creates a problem if someone leaves or arrives partway through the year — because without a special rule, HMRC could technically tax all worldwide income for the entire year.
Split-Year Treatment (SYT) solves this.
It allows a tax year to be divided into:
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UK Part of the Tax Year: Income is taxed as a UK resident
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Overseas Part of the Tax Year: Income is taxed as a non-resident (only UK income is taxable)
This can significantly reduce a tax bill, particularly when someone leaves the UK partway through the year to work abroad.
2. The Real Story: How £31,000 Was Saved
In this case:
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The individual moved to Singapore in August 2024 for full-time employment.
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They continued earning high income abroad from September onwards.
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Without Split-Year Treatment, HMRC would tax all income from 6 April 2024 to 5 April 2025, including Singapore salary.
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By applying SYT, only income earned before departure was taxable in the UK.
After deducting UK income and applying tax treaties, this legally saved around £31,000.
3. How Does It Work Legally?
Split-Year Treatment is part of the Statutory Residence Test (SRT) legislation introduced in April 2013.
To qualify, an individual must:
✔ Become non-resident during the tax year
✔ Meet one of the eight Split-Year Cases listed by HMRC
✔ Provide accurate departure dates and evidence
4. The Eight Split-Year Cases Explained Simply
HMRC allows Split-Year Treatment only in specific circumstances:
| Case | Applies When… |
|---|---|
| Case 1 | Starting full-time work abroad |
| Case 2 | Accompanying a partner who starts full-time work abroad |
| Case 3 | Ceasing to have a UK home |
| Case 4 | Starting to have a home only in the UK after living abroad |
| Case 5 | Returning to the UK from full-time work abroad |
| Case 6 | Partner returning to the UK from full-time work abroad |
| Case 7 | Ceasing full-time work abroad |
| Case 8 | Starting full-time work in the UK |
This particular £31,000-saving case fell under Case 1 — starting full-time work abroad.
5. Timeline Example: From the UK to Singapore
| Date | Event |
|---|---|
| 6 April 2024 | Start of UK tax year |
| April–July 2024 | Working in the UK |
| 15 August 2024 | Moved to Singapore |
| 1 September 2024 | Began full-time work abroad |
| 6 April 2025 | End of UK tax year |
Under Split-Year rules:
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UK period = 6 April to 14 August
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Overseas period = 15 August to 5 April
Only UK income from the UK period was taxed by HMRC.
6. What Income Becomes Tax-Free?
Once the overseas part of the year begins:
✅ Salary earned abroad
✅ Bonus and commissions paid overseas
✅ Overseas rental income
✅ Foreign investment income
These are not taxed in the UK (unless remitted under certain conditions), provided Split-Year rules are applied correctly.
7. What Must Still Be Declared?
Even after the split:
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UK rental income
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UK dividends
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UK bank interest
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Capital gains from UK property sales
These remain taxable in the UK.
8. Mistakes That Could Cost Thousands
Many people mistakenly believe that simply leaving the country means they stop paying UK tax. HMRC does notaccept this without:
❌ Form P85 not being filed
❌ Failing to register as non-resident
❌ Not meeting the Statutory Residence Test
❌ Keeping a UK home available for too long
❌ Returning to the UK too frequently within the tax year
In such cases, HMRC can reject Split-Year Treatment and tax the full global income.
9. The Role of Double Tax Treaties
Singapore and the UK have a Double Taxation Agreement (DTA), which prevents income from being taxed twice.
However, the DTA only applies after residence status is determined. Without Split-Year Treatment, an individual may still be classed as UK resident for the whole year, and the UK could tax everything first.
10. How to Claim Split-Year Treatment
✔ Step 1: Leave the UK and begin full-time work abroad
✔ Step 2: Submit Form P85 to HMRC
✔ Step 3: File a Self Assessment Tax Return (SA109)
✔ Step 4: Declare “Claim for Split-Year Treatment” in the non-residence section
✔ Step 5: Provide exact dates of departure, employment contract, rental agreements, flight bookings, etc.
This process is technical — many expats seek professional advice from specialists such as My Tax Accountant.
11. Can This Be Used to Avoid Tax Unfairly?
HMRC does not view this as a loophole in a negative sense — it is a legal right. The system is designed to ensure fairness, so that people are not taxed on income which is earned after they leave the UK and become tax resident elsewhere.
12. Final Result: Financial Outcome
| Scenario | Tax Due to HMRC |
|---|---|
| Without Split-Year Treatment | £31,000 higher |
| With Split-Year Treatment | Only UK income taxed |
13. Key Takeaways
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Split-Year Treatment is a legitimate, legal provision, not tax evasion
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It applies in specific cases such as taking full-time employment abroad
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It can save tens of thousands by preventing UK tax on overseas income
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Correct timing, documentation, and professional submission are essential
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It must be claimed — it is not automatic
