Help with Split Year Treatment/ Foreign income self assessment

[templehof1]

Hello
I am having problems working out both my husband and my self assessment forms this year as we lived in both the UK and Germany. I would be really grateful if someone could read through our situation and for any advice you can give me!

Tax Year 18-19

From April - June (me)/ August (my husband) we were both employed and self employed in the UK.
From May onwards we rented out our house in the UK. We moved out in May and lived with our parents until July (me)and August (my husband) when we moved to Germany
My husband set up as self employed in Germany as a handyman and worked from September but not full time. He then got a job from November to April which was also part time.
In Germany the tax year runs from January to December and so my husband submitted a tax return in Germany for 2018 and was refunded the tax he paid in November and December for his employment as he made losses for that part of the year. As the German tax year runs from Jan-Dec he won't be submitting another German tax return until after January 2020 but I'm thinking I will need the information from January - April 5th for the UK return.
I did not work in Germany during the 18-19 tax year (I was taking German language courses).

I've gone through the split year treatment list and I don't think we qualify for any as my neither of us were working full time in Germany and we lived in another home in the UK for longer than 16 days after leaving our actual 'home' (after renting it out).

I believe that we need to make appropriate claims under double taxation agreements (I think there is one between Germany and the UK) but not sure how this works.

What do I actually need to do to make these claims - is there a particular form I need to fill in and return with my self assessment or do I need to do this before I submit my SA?
Do I need to enter my husband's German income from September to April?
Do I need to enter the amount my husband paid in tax from September to December even though it has been refunded to him because of losses?
If I have to enter the tax from January to April - can I make an informed guess as he doesn't know how much tax he will pay in Germany yet, as he won't be doing his German tax return until after January 2020?

I would really appreciate any help and advice you could offer both me and my husband.

Thank you!

[hendersontax]

Hi templehof1. In terms of your own UK Self Assessment tax return, it sounds about right that you (personally) won't be eligible for split-year treatment under the Statutory Residence Test in your circumstances, but if you did not earn any income after leaving the UK then you will not need to make any claim under the UK-Germany double tax agreement. Your tax return will just show you as resident for the whole year and you will need to report your worldwide income earned up to the point you left.

Your husband's position is clearly more complicated and you should consider getting professional support to file the UK return. If he is not eligible for split-year treatment (again, this seems plausible from the circumstances you describe) then your next step is to consider where he is resident for the purposes of Article 4 of the UK-Germany Double Tax Agreement and for what period (i.e. where he is 'treaty-resident'). The first step here is to work out from what point your husband is treated as resident in Germany under domestic German law, then for the periods where he is resident both in the UK (under domestic UK law) and in Germany (under domestic German law), you consider the tie-breaker tests in Article 4(2) of the treaty, which start by looking at where he has a 'permanent' home.

Assuming your husband is treaty-resident in Germany from August, strictly speaking you'll need to make a claim for the German income earned from August using helpsheet HS302 (https://www.gov.uk/government/publications/dual-residents-hs302-self-assessment-helpsheet) which you should attach to the UK return. The guidance notes to the HS302 are somewhat misleading as they say "You can claim full or partial relief on UK tax on your UK income if the 2 countries have a double tax agreement that allows you to do so", but the form is equally appropriate for non-UK income which would otherwise be taxable in the UK. You suggest your husband has income from both self-employment and employment - where the income is exempt from UK tax under the relevant article of the treaty you should set this out in the table on page 4 of the HS302 with a separate line for each source of income. This income should be excluded from the main return and the German taxes which were deducted on the income should be ignored. If the self-employment income is a loss (under UK rules), then you can just exclude this from the claim.

I hope that helps but if you need further support then feel free to PM me.