RDRM12180 - Residence: The SRT: Split year treatment: Case 5: The overseas and UK parts of the tax year

The overseas part of the tax year starts at the beginning of the tax year and ends at the point the individual first meets the third automatic UK test by working full-time in the UK.

The UK part of the tax year is the period from the end of the overseas part until the end of the tax year.

Example

Andrea arrived in the UK on 20 May 2013 from Poland for a 2 week visit. She stays with her sister who is working in the UK. This is Andrea’s first trip to the UK, and she has never previously been UK resident for tax purposes.

Just before Andrea is about to return to Poland, she is offered a part-time job at a hotel. This will be her first ever job. She starts work on 10 June 2013. For the first 8 weeks of her employment she works 20 hours per week (5 hours per day), but from 5 August 2013 she is offered full-time work of 40 hours per week. Andrea takes 20 days leave during the tax year; there are no non-working days embedded within any of her periods of leave.

Although for the first 8 weeks of her employment Andrea only works 20 hours per week, she works out that she meets the third automatic UK test from 10 June 2013, her computations are:

Step 1: In a 365 days period that are no disregarded days when Andrea did more than 3 hours work overseas

Step 2: Total number of UK hours worked during 365 day period (8 weeks x 20 hours & 40 weeks x 40 hours) = 1760 hours

Step 3: Subtract disregarded days = 0, and 20 days annual leave, that can be deducted from 365 = 345 days reference period.

Step 4: Divide reference period by 7 (345/7) = 49.29, rounded down to 49

Step 5: Divide Andrea’s net UK hours by 49 (the result of step 4) 1760/49 = 35.91 hours

Andrea’s hours average out at over 35 over the 365 day period from 10 June 2013 (which is a day on which she worked for more than 3 hours in the UK). She meets the third automatic UK test from that date.

Andrea meets the criteria for Case 5 split year on the basis that:

  • she was non-UK resident in the previous tax year
  • she meets the third automatic UK test for the 365 day period commencing on 10 June 2013, (which is a day on which she worked for more than 3 hours in the UK)
  • in the part of the year from 6 April 2013 until 10 June 2013 she did not have sufficient UK ties. (Refer to table in RDRM12220)