# Split-year treatment tax question



## rossob (Jun 17, 2014)

Hi all,

I have a question about submitting my self-assessment for the tax year I moved from the UK to Spain.

My only source of income is/has been through my work as a self-employed sole trader.

I moved to Spain in August 2014, then registered as Autonomo in January 2015. Once registered I sent a notice to HMRC informing them my UK business had ceased trading the day before Automono registration was complete, and I have been paying all taxes in Spain since the date of Autonomo registration.

Now for the UK 2014-2015 tax year I have filled out a draft self-assessment noting the date I ceased trading, noting my books are only made up to that date, but also filling out the residence section and selecting the "split-year treatment" options (since they apply according to their notes).

It feels wrong to be selecting the residence and split-year treatment options, yet not be including income post-Autonomo registration and making use of the Double Tax Agreement as the way to avoid double taxation. But it would also be silly to file my UK return noting I ceased trading in Jan 2015, but including income Jan-Apr 2015 in my figures.

My feeling is perhaps I messed things up by filing that "ceased trading" notice with the HMRC after Autonomo registration was complete. It doesn't feel quite right that I have completely side-stepped the need to use the DTA for my split year. Am I right, or do I see problems where there are none?

Any advice appreciated!


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## Aranjuez (May 21, 2015)

rossob said:


> Hi all,
> 
> I have a question about submitting my self-assessment for the tax year I moved from the UK to Spain.
> 
> ...


You say you have been a sole trader throughout. How in broad terms did you operate your trade pre August 2014, in the period from August 2014 to January 2015, and in the period subsequent to January 2015. What fundamental changes if any, took place after August 2014 and at what point. Have you been in Spain continuously since August 2014, if not what broadly have been your movements. I think that sort of information would be necessary before anyone could have any meaningful input.


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## rossob (Jun 17, 2014)

Thanks for your response.

I work from home as a developer. There are no fundamental changes to my business -- even my client-base is identical as all my work is remote --, only a change in location (Aug 2014) and a change from UK sole trader to Spanish Autonomo (Jan 2015). 

I have more or less been in Spain continuously since August 2014, just a couple trips home. I've already established I'm definitely UK resident for tax purposes 2014-2015, using HMRC's online residency indicator and filling out all the days I was in Spain/UK. I also qualify for Split-year treatment (I pass the automatic third UK residency test), again using the online indicator. So I'm clear on those points.

The point I'm unsure about -- is it OK that I don't have any use for the Double Tax Agreement? Put another way, is the DTA an optional tool to avoid being taxed twice for those that need it, or is it a requirement that must be used for those moving abroad (I guess to allow the UK & Spanish government to communicate and check no income went amiss in the process of transferring from state to state, since using the DTA means the "overlap dates" are documented in the income)?

I am intending to submit my UK return up until the day I ceased trading, and since I wasn't Autonomo until the next day there's nothing to claim back via DTA, and I guess it just seems too simple? It feels like I should need to tell HMRC about my Autonomo income Jan-Apr, and use the DTA to discount the tax on that period. But that wouldn't make sense, because I ceased trading in the UK in Jan (which the HMRC are aware of, and is noted on my tax return).

Also, I'm selecting the "split-year treatment" option and filling out the "resident" sections, and giving all the information about the dates I was in UK/Spain, but it isn't having any effect on my tax liability, so it feels like I'm doing something wrong.

I realise everyone has very different tax situations, so it might not be possible to get advice here, I just thought it worth a shot incase this is a common point of doubt for UK expats in Spain.

In retrospect I wish I didn't send the "ceased trading" notice to HMRC in Jan 2015 when I became Autonomo (which seemed logical to do at the time), because then I would know exactly how to file my return, using the DTA, and would have no doubts. I seem to have made things murky by switching my business from UK-Spain overnight, somehow.

Hope that makes some sense, and no problem if it's not possible to help for my scenario.


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