Specifics - The Split Year Treatment
An Inland Revenue concession applies to earned income so that you will not be taxed on income earned after you leave the UK from an employment carried on wholly overseas, even if earned during the tax year of departure.
The same principle applies to investment income, although:
- Tax will normally continue to be deducted from interest credited to UK bank and building society accounts after you leave the UK. However, if you are not ordinarily resident it is usually possible to sign a declaration form R105 so that interest may be paid to you gross.
- Dividends from UK companies will be paid to you net of a tax credit (equal to one-ninth of the amount you receive) - they will not be paid on a gross basis. This tax credit cannot be repaid to you.
- Net rental income from UK property continues to be taxable after you leave the UK, although you may be able to make use of UK personal allowances to absorb the net income and to reduce the tax payable to nil.
- Interest income from an offshore bank account will not be liable to UK tax.
If tax has been deducted from the interest, you may be eligible to claim:
- a refund, whole or partial, under any Double Taxation Treaty between the UK and your country of residence, or
- a refund up to the level of your Personal Allowances, if you are entitled to claim these.
