Frequently Asked Questions
What are the tax implications of leaving the UK?
When you leave the UK and become non-resident, you stop paying UK tax on worldwide income. However, you still owe UK tax on UK-sourced income (rental, pension, dividends) and CGT on UK residential property.
Do I need to file a UK tax return in my year of departure?
Yes. You must file a self-assessment return for the tax year you leave, covering the UK portion of the year. Use split year treatment by filing form P85 to notify HMRC.
What is P85?
P85 "Leaving the UK" is the form you complete to notify HMRC you are leaving and to claim a UK tax refund if you have overpaid PAYE. Submit it to HMRC when you leave or after your final UK payslip.
What happens to my UK pension when I leave?
UK State Pension can be claimed abroad. Private pensions remain invested and you can draw them from the usual age. Drawdown while non-resident may be taxed depending on the double tax treaty with your new country.
Can I take my pension abroad if I leave the UK?
You cannot transfer a UK pension to an overseas scheme unless it is an HMRC-recognised Qualifying Recognised Overseas Pension Scheme (QROPS). Transfers incur a 25% Overseas Transfer Charge unless to certain qualifying schemes.
What happens to my ISA when I leave the UK?
Existing ISAs keep their tax-free status, but you cannot make new contributions while non-UK resident. You can leave the money in the ISA and it grows tax-free in the UK.
Do I pay CGT on UK shares if non-resident?
As a non-resident, you generally do not pay UK CGT on shares unless you return to the UK within 5 years (the "temporary non-residence" rules can claw back gains made while abroad).
What is the 5-year rule for CGT?
If you leave the UK, sell assets, and return within 5 years, HMRC can tax the gains you made while abroad if they arose on assets owned before you left. This prevents "flip" tax avoidance.
Do I still pay UK NI after leaving?
PAYE NI stops. You may choose to pay voluntary Class 2 NI contributions to maintain your UK State Pension entitlement while working abroad (currently very cost-effective at around £179/year for 2025/26).
What is the Statutory Residence Test when leaving?
The SRT determines when you become non-resident. You must consider automatic overseas tests (days in UK <16 or days under 46 if not resident for 3 years) and automatic UK tests and sufficient tie tests.
What happens to HMRC if I don't tell them I'm leaving?
HMRC will continue to expect UK tax returns if they have records of UK income. It is important to notify HMRC via P85 and, if self-employed, to deregister for self-assessment if you have no ongoing UK income.
Can I get a UK tax refund when I leave?
Yes. If you have overpaid PAYE tax in your year of departure (because you worked for only part of the year), you are entitled to a refund. P85 triggers this refund.