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Where Taxpayers and Advisers Meet

Split year treatment of end of service benefits, etc

edgood
Posts:2
Joined:Sun Sep 18, 2016 3:44 pm
Split year treatment of end of service benefits, etc

Postby edgood » Fri Nov 01, 2019 1:32 pm

I worked, full-time, in Asia for more than two decades and returned to the UK in July 2019. In June I received my June pay and holiday pay to the end of August. I also received a payment based on years of service and a performance bonus.

Will the holiday pay be considered as income before I returned and therefore be free of tax under split year treatment even though it covers holiday pay for the period after I returned?

Will the performance bonus and end of service payment - both paid before my return to UK - be free of UK income tax under split year treatment

etf
Posts:1284
Joined:Mon Nov 02, 2009 5:25 pm

Re: Split year treatment of end of service benefits, etc

Postby etf » Fri Nov 01, 2019 4:55 pm

HMRC guidance covering your 1st question:

Leave pay
6.33 When you are UK resident any leave pay you receive is normally taxable.
If you have been working overseas and are paid for a period of leave spent in
the UK, it will be taxed here as ‘terminal leave pay’. It is taxed as arising in the
period to which it relates – even if your entitlement to the leave pay was built
up during a period of overseas employment. Any leave pay you receive for a
period when you are UK resident is normally taxable.

GARDNER4
Posts:67
Joined:Wed Aug 06, 2008 3:41 pm

Re: Split year treatment of end of service benefits, etc

Postby GARDNER4 » Sat Nov 02, 2019 11:07 pm

Hi
You need to double check with hmrc, I personally believe that no tax is payable on any income you have earned abroad as you were not uk resident.
You need to emphasise that you was NOT resident of Uk, however if you did earn money in the uk as the job was based here, then you need to pay tax!


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