UK TAX - SPLIT YEAR TREATMENT

[surfersj]

I understand that if I move from the UK to OZ that for the calculation of UK tax that I am obliged to pay for that financial year, I am entitled to the full UK tax free personal allowance of £11,500 even if only resident in the UK for a few months before emigrating.

However, my question is -  how does this work for the tax thresholds of 20% basic rate and 40% higher rate?   For example, if I am only resident in the UK for 3 months of the tax year before emigrating, am I still entitled to earn a further £32,000 and pay tax at 20% or is there a pro rata calculation whereby the next £8,000 of income is taxed at 20% and anything above this is taxed at 40%   

And, does it make any difference in the event that my final stay in the UK before emigrating was 6 months or more versus only 3 months.

[Ken]

There are no pro rata calculations. The full 20% band applies whether you are in the UK for the full year or not.

In Australia there is a pro rata for the zero rate threshold only. You still get the full 19% band and those above that even when not in Australia for the full year.

 

PS: As to your final point, no (provided you've been a long term UK resident) it doesn't make any difference how long you were in the UK in your final tax year you'll be a tax resident up until you depart (even if less than 90 days). Once you've ceased to be a UK tax resident issues like the 90 day rule come in to play but not before.

Edited June 16, 2017 by Ken
Added PS

[surfersj]

Ken, many thanks indeed for your feedback.   It is much appreciated.   I do have one more question - what is the 90 day rule?   I only mentioned 3 months (90 days) as it just happens to be that I would hope to be moving to OZ at the end of June on the year that we would emigrate. 

[Ken]

4 hours ago, surfersj said:

Ken, many thanks indeed for your feedback.   It is much appreciated.   I do have one more question - what is the 90 day rule?   I only mentioned 3 months (90 days) as it just happens to be that I would hope to be moving to OZ at the end of June on the year that we would emigrate. 

The 90 day rule is one of the rules (there are several others) used for determining if someone is a UK tax resident or not. Basically if you spend 90 days or less in the UK in the tax year you're a non-resident and so only have to pay UK tax on your UK earnings and not your world wide earnings. Doesn't apply in your case because you'll be resident from the previous year - and in any case I suspect your earnings are almost entirely UK earnings at the moment - but I did wonder if you'd heard of the rule and were thinking it would make a difference. Incidentally because it's only one rule for determining residence there are a number of instances where even if someone meets the 90 day rule they are still a UK tax resident and equally cases where they might still be a non-resident even if they've gone over 90 days.