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# Tax Year
- URL: https://university.heavnn.io/glossary/tax-year/
- Published: 2026-10-14T08:05:00.000Z
- Updated: 2026-10-14T08:04:59.000Z
- Description: A tax year is the annual accounting period which a tax system uses to assess income and liability, with dates set by national law.
- Author: Heavnn
- Tags: #glossary, #Import 2026-10-11 07:56

## What Is a Tax Year?

A tax year is the annual accounting period which a tax system uses to assess income and liability, with dates set by national law.

*Also known as: Fiscal year, Year of assessment.*

## How Tax Year works

A tax year is the twelve-month period over which a tax authority measures income, applies residence tests and assesses liability, and the dates are fixed by domestic law, so one person moving abroad may face overlapping periods in two countries. The IRS uses the calendar year for most individuals, while the UK tax year runs from 6 April to 5 April. Day-count residence tests, filing deadlines and allowances are generally computed per tax year. Where periods differ, foreign tax credits and split-year or dual-status rules allocate income across the mismatched years, subject to local rules.

## Tax Year vs Fiscal Year

Unlike a company's fiscal year, which a business may often choose within legal limits, an individual's tax year is generally fixed by national law for all resident taxpayers.

## Example

Illustrative example: A freelancer leaves Country A, whose tax year follows the calendar year, and settles in Country B, whose tax year starts in April. Income earned between January and April falls into one Country A year but straddles two Country B years, so each authority applies its own day count and credit rules to different slices of the same earnings.

## Common misconception

**Myth:** Every country taxes income on a January-to-December basis.

**Reality:** Tax year dates are set by each country's law, and several systems, including the UK, use periods which do not match the calendar year.

## Frequently asked questions

### Is the tax year the same as the calendar year?

A tax year matches the calendar year in some systems, such as the US for most individuals, but the UK tax year runs from 6 April to 5 April, so the answer depends on national law.

### Why does the tax year matter when moving abroad?

The tax year matters when moving abroad because residence day counts, filing obligations and split-year relief are generally assessed per tax year, and different countries' years may overlap unevenly.

## Related terms

- [Split-Year Treatment](https://university.heavnn.io/glossary/split-year-treatment/) — Divides one tax year around arrival or departure
- [Dual Status Alien](https://university.heavnn.io/glossary/dual-status-alien/) — US treatment when residence changes within a year
- [Tax Residency](https://university.heavnn.io/glossary/tax-residency/) — Residence tests are applied per tax year
- [Foreign Tax Credit (FTC)](https://university.heavnn.io/glossary/foreign-tax-credit/) — Matches foreign tax across mismatched tax years

## Related guides

- [Accounting and bookkeeping for digital nomads](https://university.heavnn.io/managing-accounting-and-bookkeeping-for-digital-nomads/) — Record-keeping across differing tax years
- [Why digital nomads are leaving the UK](https://university.heavnn.io/why-digital-nomads-are-leaving-the-uk-and-where-theyre-going/) — UK April-to-April tax year context for leavers

## Sources

- [IRS definition of tax year](https://www.irs.gov/businesses/small-businesses-self-employed/tax-years?ref=university.heavnn.io)
- [UK tax year dates](https://www.gov.uk/self-assessment-tax-returns/deadlines?ref=university.heavnn.io)

*Last verified: 2026-10-09\. This entry is general information, not tax or legal advice; rules vary by country and change over time.*