Split year non-residence concession ESC A11 and s811 ITA 2007

Many tax advisers will be familiar with the ‘split-year’ residence treatment offered by ESC A11. This will include cases where an individual leaves the UK to work under a full-time employment contract abroad (spanning at least one UK tax year). A word of warning as some have not looked at the small print of the concession. It does not affect the UK tax treatment of dividends paid after someones leaves for the purposes of a long term employment contract abroad. ESC A11 specifically says that the concession does not apply to for the purposes of s811 ITA 2007 which applies to limit UK tax on UK dividends etc received by a non-residence. This only applies for complete UK tax years and is not therefore subject to the ESC a11 split year treatment. This can have an important impact on the timing of UK dividend payments after someones goes abroad and claims non-resident status for the remaining part of the UK tax year of departure. Overseas tax and treaty relief also needs to be factored in.