Leaving the UK
The main points you need to know before you go.
How does tax work for UK residents?
A UK resident declares all his/her worldwide income, but need only pay UK tax on UK income if they have recently arrived in the UK after a long period abroad (see Income from abroad), while a non-resident generally only pays UK tax on income or (some) gains arising in the UK. In calculating the amount of income tax due the taxpayer may receive a certain amount tax free (this is the Personal Allowance), then a certain amount is taxed at the basic rate and the rest is taxed at the higher rates. National Insurance contributions are not payable by non-residents unless they wish to preserve their UK rights to state pension and healthcare by making voluntary contributions.
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Will I get a tax refund on leaving the UK?
If you have been an employee in the UK, the taxation of your income was dealt with by your employer under the PAYE scheme. This scheme assumes that your allowances and entitlement to the basic rate of tax are spread evenly over the year. This means that if you leave half way through the year you have only had half your tax free allowance (“Personal Allowance”) and only half the amount at the basic rate to which you are entitled. The result is that for that tax year, once you have emigrated, you will have paid too much tax if you have no other income arising in the UK. If you have other income such as property income or deposit interest you may still have paid too much tax. You may claim a refund on leaving the UK on form P85 (use form P85S if you are a foreign national and were in the UK for employment only). The form will ask you about the income you expect to have arising in the UK after you have left (including property income) and this will be taken into account in calculating your refund. As with any calculation made before the end of the tax year, this will only be an approximate calculation, so do remember to submit your Tax Return following the end of the year in which you emigrated if you want a precise calculation.
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What if I have other income in the UK?
Other income arising in the UK, including rental income, is still taxable even though you may be non-resident. See Non-Resident landlord.
Do I still have to pay Capital Gains Tax if I have left the UK?
An individual who is resident in the UK is liable to Capital Gains Tax (CGT) on all disposals where the gain in value exceeds the Annual Exempt Amount. See Capital Gains Tax. There are exceptions for non-domiciled persons making gains overseas, but these rules are changing on 5th April 2025.
Non-residents may be subject to CGT on the gains in excess of the Annual Exempt Amount made on the disposal of UK land and buildings. See Capital Gains Tax or contact us. Non-residents are subject to CGT on gains accruing after 5th April 2015 (residential property) and 5th April 2019 (non-residential property).
What happens in the year that I leave the UK?
The “Split Year” treatment is a means of treating people as being non-resident for tax purposes from the time they leave the UK to the time they return to become resident. If you do not use the Split Year treatment, you may be UK tax resident until 5th April after you emigrate and on return from 6th April before you return. The Split Year treatment may only be used if the Statutory Residency Test indicates that you are UK resident. If you meet the criteria for the Split Year treatment you must use it.
If you make a disposal while non-resident, gains accruing before 5th April 2015 (residential property) or 5th April 2019 (non-residential land or buildings) and realised on the disposal are outside the scope of UK tax. However, to qualify for this treatment you must remain non-resident for five full UK tax years. If you are not non-resident for five full tax years, you will pay Capital Gains Tax on the whole gain.
In the year of departure or the year of arrival, the Split Year treatment may shelter some income or gains from UK tax. There are eight scenarios where the Split Year treatment may apply, and each has its own set of qualifying criteria. Contact us for more information.
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How is my pension taxed after I leave the UK?
The tax treaties between the UK and most other countries removes a pension paid from the UK from UK tax and it becomes taxable only in the country where you take up residence, but UK State Pension and most local government pensions are taxed in the UK. If your UK pension has been taxed after you left the UK then you may reclaim the tax either through your Self Assessment Tax Return or through an overpayment relief claim. There is a four year cut-off for claims.
Do I have to pay Inheritance Tax if I have left the UK?
With effect from 6th April 2025, the test to ascertain whether any non-UK assets are subject to consideration for Inheritance Tax (IHT) will be whether the individual has been UK resident for at least 10 out of the last 20 years.
