Leaving the UK: A Complete Tax Guide for Moving Abroad

When you leave the UK, you remain UK tax resident, and taxable on your worldwide income and gains, until you actually meet the conditions to become non-resident under the Statutory Residence Test (SRT). Physically moving abroad does not, by itself, end your UK tax residence. The SRT is a day-counting and connection-based test that decides your status for a whole tax year, so the date you leave and how many days you later spend back in the UK both matter.

In practice, three things change when you emigrate. First, your residence status for the tax year of departure is determined, often with the help of split-year treatment so the year is divided into a UK part and an overseas part. Second, your future years are assessed under the SRT, and if you are non-resident the UK generally only taxes income and gains that arise from UK sources. Third, certain anti-avoidance rules, in particular the temporary non-residence rules, can reach back and tax you on your return if your time abroad is short.

Because the rules interact, the cleanest outcome usually depends on getting your departure date, your day counts and your paperwork to line up. This is the core of cross-border departure planning, and it is the kind of work a fixed-fee adviser can map out before you go rather than after a problem appears.

You tell HMRC you are leaving the UK using form P85, unless you already complete a Self Assessment tax return for the year you leave, in which case you report your departure on that return instead. You should tell HMRC if you are leaving the UK permanently, or going to work abroad full-time for at least one full UK tax year. You do not need to do anything special for a holiday or a short business trip.

Form P85 is used to get your Income Tax right when you go and, where relevant, to claim back tax you have overpaid through PAYE. If you have a P45 from a UK employer, you send parts 2 and 3 with the P85. You can submit the P85 online through your HMRC account, although if you have not yet left the UK you must print and post it.

If you are within Self Assessment, for example because you have rental income, are self-employed, or are a higher earner, you generally do not file a P85 as well. Instead you complete the residence pages (form SA109) with your main return to claim non-resident status and, where it applies, split-year treatment. One exception is going to work full-time abroad for a UK-based employer: HMRC may expect both a P85 and a Self Assessment return with the SA109 pages. Done correctly, this is the moving abroad UK tax paperwork that both records your departure and triggers any refund.

Whether you are still UK tax resident after leaving is decided by the Statutory Residence Test, which looks at the days you spend in the UK and your ongoing UK connections. The test runs in a set order: the automatic overseas tests come first, then the automatic UK tests, then the sufficient ties test. If any automatic overseas test is met, you are non-resident for that tax year and the rest of the test is not applied.

The automatic overseas tests are the most relevant for people leaving the UK. In outline, you are automatically non-resident for a tax year if any of the following apply:

• You were UK resident in one or more of the previous three tax years and you spend fewer than 16 days in the UK in the current year.
• You were not UK resident in any of the previous three tax years and you spend fewer than 46 days in the UK in the current year.
• You work full-time (sufficient hours) overseas across the tax year with no significant break, spend fewer than 91 days in the UK, and work in the UK (more than three hours in a day) on no more than 30 days.

If you do not meet an automatic overseas test, your status turns on the automatic UK tests and then on how many UK ties you keep (such as family, available accommodation, work and time spent here in earlier years). Day counting is precise and the definition of a day in the UK has its own rules, so even a handful of return trips can change the answer. Our companion guide on the Statutory Residence Test and the SRT day calculator can help you sketch this out before you commit to dates.

Split-year treatment lets the tax year of your departure be split into a UK part and an overseas part, so that for the overseas part you are taxed broadly as a non-resident and the UK only taxes your worldwide income up to the day you leave. Without it, residence applies to the whole tax year, which could mean the UK taxing income you earn abroad after you have already gone.

Split-year treatment is not optional planning you simply choose: you must fall within one of the statutory cases. For people leaving the UK, the three departure cases are:

• Case 1: you leave to start full-time work overseas. The overseas part begins on the day you start your full-time overseas work.
• Case 2: you leave because your partner is starting full-time work overseas and you join them, ceasing to have a UK home.
• Case 3: you leave the UK to live abroad and cease to have a home in the UK. The overseas part begins the day after you no longer have a UK home, and you must have an overseas home and limited UK days.

Each case has detailed conditions that must all be met, and you generally also have to be non-resident for the following tax year. The case you qualify under, and therefore the precise date your overseas part starts, can change your tax bill significantly, which is why split year treatment leaving the UK is worth pinning down before you set your departure date rather than afterwards.

Yes, many people are due a tax refund for the year they leave the UK, particularly if they were employed under PAYE and leave partway through the tax year. PAYE spreads your tax-free personal allowance (£12,570 for 2025/26) evenly across the year, so if you stop earning UK employment income in, say, July, you will usually have paid more tax than your part-year earnings actually require once your full allowance is set against them.

A tax refund leaving UK mid year is normally claimed through form P85, or through your Self Assessment return if you are within the system. For example, suppose someone earns £30,000 a year under PAYE and leaves the UK in July after earning around £10,000 in the new tax year. Their full £12,570 personal allowance can cover that £10,000, so much of the PAYE tax deducted before they left may be repayable. The exact figure depends on the months worked, the tax already deducted and any other UK income.

Note that becoming non-resident does not automatically remove your entitlement to the UK personal allowance. UK nationals and nationals of EEA countries normally keep the personal allowance against their UK-source income even after they leave, which is what makes these year-of-departure refunds possible.

After you leave the UK, you generally still pay UK tax on income that has a UK source, even though your overseas income usually falls out of UK tax once you are non-resident. UK-source income that commonly remains taxable includes rental income from UK property, most UK pensions, certain UK employment income for work physically done in the UK, and some UK investment income. A double-tax treaty between the UK and your new country may reduce or reallocate the tax, but it does not remove the UK reporting obligation.

A key concept here is disregarded income. For non-residents, some UK investment income (such as UK dividends and interest) can be treated as disregarded, which caps the UK tax in a way that can be favourable but also affects your personal allowance position. The interaction is technical, and the right answer depends on the mix of your UK income, so it is a common point where cross-border clients benefit from a calculation rather than a guess.

Once you are non-resident, the UK generally does not tax your worldwide capital gains, with the major exception of gains on UK land and property, which remain within UK tax for non-residents and must be reported within 60 days of completion. The bigger trap for people moving abroad is the temporary non-residence rule, which can tax gains you made while away if you return to the UK too soon.

Under the temporary non-residence rules, if you had sole UK residence for at least four of the seven tax years before you left, and you then return to the UK after a period of non-residence of five years or less, certain gains you realised during your time abroad are treated as arising in the year you return and are taxed then. The practical effect is that you must be non-resident for more than five complete UK tax years to be sure those gains escape UK tax.

There is an important carve-out: assets you both acquire and dispose of entirely while you are non-resident are generally outside these rules, so it is mainly gains on assets you held before leaving that are caught. For 2025/26 the main CGT rates are 18% within your basic rate band and 24% above it, with a £3,000 annual exempt amount. For example, suppose someone leaves the UK, sells a large shareholding they had owned for years while living abroad, and then moves back to the UK three years later: that gain could be dragged into UK tax in the year of return. Timing a disposal, or the return itself, is exactly where advice pays for itself.

The single most influential lever when leaving the UK is timing: the date you go, the tax year it falls in, and how long you stay non-resident can all change your UK tax bill. Because residence is assessed by tax year (6 April to 5 April) and split-year treatment hinges on specific trigger dates, a departure a few weeks either side of 5 April, or a return a few months either side of the five-year point, can produce very different outcomes.

Common timing considerations include:

• Aligning your departure with a split-year case so the UK stops taxing your overseas income from the right date.
• Realising large capital gains either before you leave or after you have passed five complete tax years of non-residence, to stay clear of the temporary non-residence rules.
• Watching your UK day count each year so a few return trips do not accidentally make you UK resident again under the SRT.
• Coordinating bonuses, share vesting and dividend timing with your UK and overseas periods.

These decisions are easier and cheaper to get right before you leave. A short, fixed-fee planning exercise can model the alternatives so you are not relying on the calendar by accident.

Leaving the UK can create gaps in your National Insurance record, which in turn can reduce your UK State Pension, but you can often pay voluntary contributions while abroad to protect it. You need at least 10 qualifying years for any new State Pension and usually around 35 qualifying years for the full new State Pension, so even a few missing years can matter over a long career abroad.

Historically, eligible expats could pay voluntary Class 2 contributions at a low weekly rate. However, voluntary Class 2 contributions for periods spent abroad end from 6 April 2026, after which Class 3 is the main voluntary route for most people topping up qualifying years. For the 2025/26 tax year the rates are £3.50 per week (£182 per year) for Class 2 and £17.75 per week (£923 per year) for Class 3. Existing voluntary contributors abroad are being given a route to continue, but the eligibility rules for new applicants from abroad are tightening to require a stronger UK connection.

Voluntary NICs are often very good value relative to the extra State Pension they buy, but they are not always worthwhile, for example if you already have enough qualifying years or expect to build a pension in your new country. It is worth requesting a State Pension forecast and checking your NI record before deciding.

Your destination country changes the picture significantly, because each has its own residence rules, tax rates and double-tax treaty with the UK that together decide where each slice of your income and gains is taxed. The UK side of your departure is only half the story; the two systems have to be read together.

• United States: the US taxes citizens and green card holders on worldwide income wherever they live, and has strict reporting (FBAR, FATCA). The UK to US move needs both sides planned in tandem, and pension and investment structures that are efficient in the UK can be penalised in the US.
• Australia: Australia taxes residents on worldwide income, has its own residency tests and a capital gains regime, and a UK to Australia move often involves split-year timing on the UK side and temporary or permanent resident status on the Australian side.
• United Arab Emirates: the UAE has no personal income tax, which makes it attractive, but you still must become properly UK non-resident under the SRT, and UK-source income such as rent and certain pensions can remain UK-taxable.
• Italy: Italy taxes residents on worldwide income but offers special regimes for new residents, and the UK to Italy move needs the Italian regime and the UK split-year position to be coordinated.
• Thailand: Thailand taxes residents on certain remitted foreign income, so how and when you bring funds into Thailand can matter, alongside getting your UK non-residence right.

Treaties also decide tie-breaker residence where both countries claim you, and which country taxes pensions, dividends and gains. Because Horizon UK Tax Solutions specialises in cross-border work, we can map the UK and destination positions together rather than leaving you to reconcile two sets of advice.

Before you leave the UK, work through a short checklist so your departure is clean on the UK side and you do not miss a refund or trigger an avoidable charge. The essentials are:

• Confirm your likely residence status for the year of departure and the following year under the Statutory Residence Test, and check whether you qualify for a split-year case.
• Plan your departure date around the right split-year trigger and your UK day count.
• Tell HMRC you are leaving via form P85, or report your departure on your Self Assessment return if you file one.
• Claim any refund due for the year you leave, especially if you were employed under PAYE.
• If you keep a UK rental property, register under the Non-Resident Landlord Scheme (form NRL1) so rent can be paid gross, and remember you must still file UK returns.
• Check your National Insurance record and State Pension forecast, and decide whether to pay voluntary contributions while abroad.
• Review any large capital gains and the temporary non-residence rules before realising them, and note the five complete tax years threshold.
• Check the double-tax treaty between the UK and your destination so UK pensions, rent, dividends and gains are taxed in the right place.
• Keep records of travel dates, UK days and your overseas home, which you will need to support your non-resident position.

If you would like a second pair of eyes on this before you go, a free 30-minute clarity call is a low-commitment way to check you have not missed anything, and any follow-on work is quoted as a fixed fee agreed upfront.