---
title: "An Expat’s Split Year Treatment: A Case Study & 2026 Guide"
description: Determining tax residency for an expatriate moving into or out of the UK during a tax year requires precise application of the Statutory Residence Test (SRT). Governed by Schedule 45 to the Finance Act 2013, the SRT strictly dictates when…
url: "https://www.accountingfirms.co.uk/knowledge-bank/an-expats-split-year-treatment-a-case-study/"
updated: "2026-08-11"
category: "Expat & Non-Resident Tax"
---

# An Expat’s Split Year Treatment: A Case Study & 2026 Guide

Determining tax residency for an expatriate moving into or out of the UK during a tax year requires precise application of the Statutory Residence Test (SRT). Governed by Schedule 45 to the Finance Act 2013, the SRT strictly dictates when an individual is resident or non-resident.  Fortunately, the legislation provides "split year treatment" to prevent expats from facing UK taxation on their worldwide income for the entire tax year of arrival or departure.

This guide explores the mechanics of split year treatment, a practical Case 6 returning expat scenario, and how the new Foreign Income and Gains (FIG) regime [impacts tax planning](https://www.accountingfirms.co.uk/blog/role-of-accountants-in-mergers-and-acquisitions/) in 2026.

## The Legislative Foundation of the Split Year

When an individual satisfies the conditions for split year treatment, the [tax year](https://www.accountingfirms.co.uk/blog/good-timing-can-save-a-lot-of-tax/) is legally divided into a "UK part" and an "overseas part.  The legislation dictates separate tax treatments for income and [capital gains](https://www.accountingfirms.co.uk/blog/heading-for-the-exit/) falling into each respective period.

### Income Tax (ITEPA 2003)

Section 15 of the [Income Tax](https://www.accountingfirms.co.uk/blog/hmrc-payment-niers/) (Earnings and Pensions) Act 2003 (ITEPA 2003) sets out the charging provisions for general earnings in a split year.  The statute specifically excludes earnings attributable to the overseas part of the year from UK taxable earnings, provided those earnings do not relate to duties performed in the UK.

> (1) This section applies to general earnings for a [tax year](https://www.accountingfirms.co.uk/knowledge-bank/basis-period-reform-a-practical-guide/) for which the employee is UK resident except that, in the case of a split year, it does not apply to any part of those earnings that is excluded... (1A) General earnings are 'excluded' if they— (a) are attributable to the overseas part of the split year, and (b) are neither— (i) general earnings in respect of duties performed in the United Kingdom..."

### Capital Gains Tax (TCGA 1992)

Section 1G of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) mirrors this principle for capital gains.  Gains accruing to the individual in the overseas part of the tax year are generally only chargeable to UK Capital Gains Tax (CGT) if they arise from the disposal of UK residential property or assets connected to a UK branch or agency.

## An Expat's Split Year Treatment: A Case Study (Case 6)

The SRT outlines eight specific "Cases" that trigger split year treatment. Case 6 applies to individuals who return to the UK after a period of working full-time overseas.

Consider the case of Edward, an expatriate who left the UK in 2020 to work full-time in Switzerland. Edward retained a UK apartment for family visits. On 31 October 2025, Edward retired from his Swiss employment (his last overseas workday) and permanently relocated back to his UK apartment on 3 November 2025.

To qualify for Case 6 split year treatment for the 2025/26 tax year, Edward must navigate the following:

1. He must have been non-UK resident for the previous tax year (2024/25) due to meeting the [full-time work overseas test](https://www.accountingfirms.co.uk/knowledge-bank/failing-the-full-time-work-overseas-test-a-case-study/).
2. He must be UK resident for the subsequent tax year (2026/27).
3. He must genuinely work full-time overseas from 6 April 2025 until his retirement.

Assuming Edward meets the strict day-count limits for UK work days prior to his return, HMRC divides his 2025/26 tax year.  The overseas part runs from 6 April 2025 to 31 October 2025 (the last day he satisfied the sufficient hours test overseas).  The UK part commences on 1 November 2025 and ends on 5 April 2026.

## The 2026 Landscape: Split Years and the FIG Regime

For expats arriving in the UK, the [tax landscape](https://www.accountingfirms.co.uk/blog/time-to-disincorporate/) shifted dramatically following the Finance Act 2025. Effective from 6 April 2025, the government abolished the [remittance basis](https://www.accountingfirms.co.uk/blog/remittance-basis/) of taxation, replacing it with a new residence-based Foreign Income and Gains (FIG) regime.

This change profoundly impacts how arriving expats handle their non-UK income during the UK part of a split year.

| Split Year Component | Treatment of Foreign Income / Gains (Post-April 2025) | Statutory Requirement |
| --- | --- | --- |
| **Overseas Part** | Excluded from UK Tax. | ITEPA 2003 s 15 / TCGA 1992 s 1G |
| **UK Part** | 100% relief available under the new FIG regime, provided the individual was non-UK resident for the prior 10 consecutive years. | Finance Act 2025 FIG Rules |

If an expat arriving under a Case 4 or Case 5 split year (starting a home or full-time work in the UK) qualifies for the new FIG relief, they can bring their foreign income and gains into the UK during the UK part of the year entirely tax-free for their first 4 years of residency.  This completely removes the previous need to meticulously segregate offshore accounts to avoid remittance basis charges upon arrival.

 

*Consider researching how the Temporary Non-Residence (TNR) rules under section 10A of TCGA 1992 interact with the overseas part of a split year when an expat leaves the UK but returns within five years.*