The arrival-year mistake we see most often

A relocation is a year of firsts, and tax is rarely near the top of anyone's list. It tends to surface the following spring, when two returns are due and neither looks like the ones that came before.

The mistake is not usually a technical one. It is a timing one: treating the arrival year as the first ordinary year in the new country, rather than as a split year with its own rules, its own elections, and a planning window that closed on the day the plane landed.

People assume they became resident when they arrived. In the US, residence under the day-count test can begin on the first day of presence in the year — which can pull income from before the move into the US net. In the UK, split-year treatment can divide the year into resident and non-resident parts, but only if specific conditions are met, and it is not automatic.

Getting the start date right is worth more than almost anything else in the year, because everything downstream — what is taxed, by whom, at what rate — depends on it.

The most expensive version of this we see is a disposal that happened a few weeks late. Someone sells a property, or a fund, or some shares shortly after arriving, not realising that the new country now has a claim on the gain — often computed on a different basis, sometimes in a different currency, occasionally with no relief for tax paid at home.

The same sale a month earlier, before residence began, would frequently have been taxed once, in one country, under rules the seller already understood.

Arrival years carry choices that are not available later. In the US, there are elections about how the first year is treated and how a non-US spouse is handled. In the UK, the residence position and the treatment of overseas income depend on facts established in that year. Several of these are hard or impossible to revisit.

None of them are difficult to get right if they are considered before the return is prepared. They are all difficult to fix afterwards.

Talk to someone before you move, not after. A single conversation in the tax year before a relocation can move a disposal, restructure an investment, or set up a position that makes the arrival year simple. Our pre-move reviews are the cheapest piece of work we do, and they are the work with the highest return.