Linear flow splitting is a new cold forming process for the production of branched sheet metal structures. It induces severe plastic strain in the processing zone which results in the formation of an UFG microstructure and an increase in hardness and strength in the flanges. Inbuilt deformation gradients in the processing zone lead to steep gradients in the microstructure and mechanical properties. In the present paper the gradients in the UFG microstructure and the mechanical properties of a HSLA steel (ZStE 500) processed by linear flow splitting are presented, as well as a calculation of local strength from hardness measurements on the basis of the Ludwikequation. In order to investigate the thermal stability of the UFG microstructure heat treatments below the recrystallization temperature were chosen. The coarsening process and the development of the low angle to high angle grain boundary ratio in the gradient UFG microstructure were monitored by EBSD measurements. It is shown that heat treatment can lead to a grain refinement due to a strong fragmentation of elongated grains while only little coarsening in the transverse direction occurs. A smoothing of the gradients in the UFG microstructure as well as in the mechanical properties is observed.