SA109 : Non Resident Case Study 1 - Leaving UK & Split Year Treatment

SA109 : Non Resident Case Study 1 - Leaving UK & Split Year Treatment

CASE STUDY 1 


Venessa left the UK on 1 November 2019 to work permanently in France. She currently completes a tax return as she receives dividend income from her UK investments and also rents out a property. She has always been UK resident. She started work in Paris on 7 November 2019 and will work on average 40 hours per week. She will occasionally be required to attend business meetings in the UK. She is keeping the house she lived in vacant and will come back to the UK periodically to visit family and friends. 


FAQ: 


Q.      What tax year does this relate to? 


A.      The tax year is 2019/20. 


 

Q.      What is Venessa’s residency status for 2019/20? 


A.      Venessa will be UK resident for 2019/20 under the automatic residence test as she spent 183 days or more in the UK. However, Venessa could apply split year treatment to 2019/20 under Case 1 provided that: 

  1. Venessa was UK resident in 2018/19; 
  1. Venessa is non-resident in 2020/21 under the third automatic overseas test. This will be the case providing that she continues working abroad for at least 35 hours per week on average over the tax year and she does not spend more than 90 days in the UK and more than 30 days working in the UK; 
  1. After commencement of her overseas work, Venessa does not spend more than the permitted amount of days in the UK. The overseas work starts on 7 November 2019. There are 7 complete months between 6 April and 7 November 2019, so for 2019/20 the “permitted limit” will be: 
                90 − [90 × 7/12] = 37 days; and 
  1. Her UK workdays do not exceed the “permitted limit”. For 2019/20 the “permitted limit” will be: 
                30 − [30 × 7/12] = 12 days. 

Assuming these conditions are satisfied, Venessa will be UK resident for the period 6 April 2019 to 6 November 2019 and non-UK resident for the period 7 November 2019 to 5 April 2020. 



Q.      What pages will Venessa need to include on her tax return? 


A.      Venessa will have to include the following pages on her tax return:
  1. Savings & Investments (SA100 & SA101) – Dividend income 
  2. Employment (SA102) – Employment income 
  3. Property (SA105) – Rental income 
  4. Residency (SA109) – Date left UK, split year, personal allowance 

Q.      Will Venessa have to complete a tax return for 2020/21? 

A.      Yes, Venessa will have to submit a tax return for 2020/21 and every year she continues to receive rental income and UK dividend income. She will have to include the following pages on her tax return: 

  1. Savings & Investments (SA100 & SA101) – Dividend income 
  2. Property (SA105) – Rental income 
  3. Residency (SA109) – Days visited UK, personal allowance