Non Resident Case Study 3 - Leaving UK & Split Year Treatment with return visits to the UK

Non Resident Case Study 3 - Leaving UK & Split Year Treatment with return visits to the UK

CASE STUDY 3 


Kirk emigrated from the UK on 6 January 2020 to live with his girlfriend Akiko in Japan. He had always previously been resident in the UK. Kirk moved out of his UK home on 5 January 2020. The property is currently on the market to be sold. He owns a property portfolio in the UK and that is his only source of income.


Akiko has an apartment in Kyoto. Kirk intends to live permanently in Japan. He will learn Japanese for 3 months before finding work. 


After his departure, Kirk intends to visit the UK on average for 4 to 6 weeks a year to see his parents. His first return visit will not be until after 6 April 2020. 

FAQ: 


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


A.      Kirk will be UK resident for 2019/20 under the automatic residence test as he spent 183 days or more in the UK. 



Q.      What is Kirk’s residency status for 2020/21? 


A.      In the following tax year (2020/21), Kirk will not satisfy the conditions of the automatic overseas test as he has been UK resident in at least one of the previous 3 tax years and he will spend at least 16 days in the UK. 


However, he will be non-UK resident in 2020/21 under the rules for “Leavers” as he will spend less than 46 days in the UK and he will not have 4 UK ties. 

Kirk had a home in the UK in 2019/20, but he ceased to have a home in the UK from the date he moved out on 5 January 2020. Thereafter his only home will be in Japan. He will therefore have a “sufficient link” to Japan. 


He has not made any return visits to the UK in 2019/20 (so his days back in the UK are clearly fewer than 16). 2019/20 will therefore be a split year under Case 3. 

Kirk will therefore be: 

  1. UK resident for the period 6 April 2019 to 4 January 2020; and
  2. Non-UK resident from 5 January 2020 onwards. 

Q.      What pages will Kirk need to include on his tax return for 2019/20? 


A.      Kirk will have to include the following pages on his tax return: 

  1. Property (SA105) – Rental income
  2. Residency (SA109) – Date left UK, split year, personal allowance 


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

A.      Yes, Kirk will have to submit a tax return for 2020/21 and every year he continues to receive rental income. He will have to include the following pages on his tax return: 

  1. Property (SA105) – Rental income
  2. Residency (SA109) – Days visited UK, personal allowance