The UK tax system does not end at the border. Moving abroad changes your tax position significantly — but it does not cut all ties automatically, and HMRC does not assume you have left just because you stopped turning up. The rules are detailed, the consequences of getting them wrong are expensive, and most expat tax problems are caused by one of a small set of avoidable mistakes.
This guide covers everything you need to know before, during, and after leaving the UK: the Statutory Residence Test, how to notify HMRC, which income streams are still taxable in the UK, what happens to UK property you sell after departure, National Insurance, and the common traps that catch people out.
Step one: the Statutory Residence Test
Before Brexit, EU freedom of movement meant many people moved between the UK and Europe without ever formally addressing their tax residency. That ambiguity created problems. The Statutory Residence Test (SRT), introduced in April 2013, replaced the previous vague guidance with a structured, three-stage test that applies to all UK tax years from 2013–14 onwards.
The SRT determines whether you are UK resident for tax purposes in a given tax year (6 April to 5 April). It works in order:
Stage 1: Automatic overseas tests
You are automatically non-resident if any of the following applies:
| Test | Condition |
|---|---|
| Fewer than 16 days in UK | You spend 15 days or fewer in the UK in the tax year (applies to everyone) |
| Fewer than 46 days in UK | You spend 45 days or fewer AND were not UK resident in any of the 3 preceding tax years |
| Full-time work overseas | You work overseas full-time (averaging ≥35 hours/week, with no significant UK work) AND spend fewer than 91 days in the UK, with no more than 30 days of UK work |
If you meet any automatic overseas test, you are non-resident for that year and the analysis stops. For most people who move abroad and genuinely settle overseas, the 183-day rule (staying fewer than 183 days) is the practical target — but note the table above: the most powerful test is fewer than 16 days, which gives automatic non-residency unconditionally. If you intend to minimise UK visits in the first year, 15 days is the clean threshold.
Stage 2: Automatic UK tests
If no automatic overseas test applies, you are automatically resident if any of these applies:
| Test | Condition |
|---|---|
| 183+ days in UK | You spend 183 days or more in the UK in the tax year |
| Only home is in UK | You have a home in the UK, you have no overseas home (or have one but rarely use it), and you spend at least 30 days in that UK home during the year |
| Full-time work in UK | You work full-time in the UK for any 365-day period that falls within the tax year |
Stage 3: The sufficient ties test
If neither automatic test resolves your status, you look at your UK ties. There are five types: family tie (spouse/civil partner/minor children resident in UK), accommodation tie (available accommodation you use even once), work tie (working in UK for 40+ days), 90-day tie (spent 90+ days in UK in either of the two previous tax years), and country tie (UK is the country you spend most days in that year).
The more days you spend in the UK, the fewer ties you are allowed before you become UK resident. Someone who spent 120–182 days in the UK and has 3 or more ties is UK resident. The exact table is in HMRC's RDR3 guidance. The principle is simple: the more you connect with the UK, the harder it is to be non-resident.
Split-year treatment
The tax year runs 6 April to 5 April. If you move abroad mid-year, you do not want to be taxed as UK resident for the entire year — but under the SRT, residency is assessed year by year. Split-year treatment solves this by dividing the tax year into a UK part and an overseas part.
There are 8 cases in the split-year rules. The most relevant for UK leavers are:
| Case | Who it applies to |
|---|---|
| Case 1 | You start full-time work overseas during the tax year and meet the full-time overseas work test for the remainder of the year |
| Case 2 | Your partner moves overseas for full-time work and you accompany or join them, with limited UK days in the overseas part |
| Case 3 | You stop having a UK home during the tax year and have either no UK home or limited days in one thereafter |
| Case 4 | You leave the UK mid-year and are UK resident in that year but non-resident in the following year (general departure case — most commonly used) |
You claim split-year treatment on your Self Assessment tax return for the year of departure. This means you still need to file a return for that year. In the overseas part of the split year, foreign income is not subject to UK tax — only UK-source income remains taxable.
Form P85 — notifying HMRC you are leaving
P85 is the form you use to tell HMRC you are leaving the UK permanently or indefinitely. It covers:
- Your employment situation (leaving UK employment, moving to overseas employer, becoming self-employed abroad)
- Whether you will have UK income after you leave (rental income, pensions, investments)
- Your intended country of residence
- Whether you expect to return to the UK
You can submit P85 online via the HMRC website or by post. Submitting it prompts HMRC to issue any PAYE refund due for the remainder of the tax year — if you were employed on a PAYE basis and left mid-year, you may have overpaid tax against the full-year personal allowance and a refund will follow.
Important: P85 does not replace your Self Assessment obligation. If you have self-employment income, rental income, or other sources requiring Self Assessment, you must still file. In the year of departure, your return covers income from 6 April to your departure date in the UK part, and potentially UK-source income for the overseas part.
What UK tax applies after you leave
Once you are non-resident, the UK still taxes income that arises in the UK. The main categories:
UK rental income
Rental income from UK property is always taxable in the UK, regardless of your residence status. This is often the most significant ongoing UK tax obligation for people who leave but keep a UK property.
As a non-resident landlord, your letting agent or tenant is required by law to deduct 20% basic rate tax from your rent and pay it to HMRC — unless you are registered under the Non-Resident Landlord (NRL) scheme, which allows you to receive rent gross. To register, you apply to HMRC (form NRL1) and must still file a UK Self Assessment return each year to declare rental profit and pay the correct amount of tax. Allowable expenses (mortgage interest if relevant, repairs, management fees) reduce the taxable rental profit.
UK employment income
If you do any work in the UK — even a few days — that income is taxable in the UK under normal PAYE rules. If your overseas employer sends you to the UK for work trips, the days worked there create UK-source employment income. A double tax treaty with your country of residence may provide relief, but the income must still typically be reported.
UK pension income
State Pension and most private or occupational UK pension income is taxable in the UK if you are non-resident, unless a double tax treaty with your country of residence allocates taxing rights solely to that country. Some treaties (e.g., UK–Ireland, UK–Germany, UK–Portugal) do allocate pension taxing rights to the country of residence for certain pension types. Check the specific treaty and whether it covers state pension, government service pension, or private pension separately — the rules differ by type.
UK savings and dividends
Interest from UK bank accounts is generally exempt from UK tax for non-residents under the UK's domestic legislation (most UK banks will apply a zero withholding once you are registered as non-resident with them). UK dividends from UK companies: the withholding tax position depends on the applicable double tax treaty, but the UK charges 0% withholding on most UK dividends to non-residents under domestic law. Declare in your country of residence as required.
Capital Gains Tax on UK property
This is one of the most important areas for UK leavers and one of the most misunderstood. Until April 2015, non-residents were not subject to UK CGT on the sale of UK residential property. That changed with the introduction of Non-Resident Capital Gains Tax (NRCGT). Since April 2019 it was extended to all UK property and certain indirect disposals. The position now:
- All UK property (residential and commercial) sold by non-residents is within the scope of UK CGT.
- For residential property owned before 5 April 2015, the gain is calculated from the higher of the original cost or the April 2015 market value (rebasing). You can alternatively elect to use the original cost if that produces a lower gain.
- You must report and pay the CGT within 60 days of the completion date, using the UK Property Reporting Service. This is separate from Self Assessment — even if you file a Self Assessment return, the property CGT must be reported and paid within 60 days.
- Principal Private Residence (PPR) relief applies for periods of actual occupation. If the property was your main home for part of the ownership period, that fraction of the gain is exempt. The last 9 months of ownership always qualify for PPR (reduced from 36 months in 2020) even if you are not living there.
CGT rate for non-residents on residential property
Non-residents pay the same UK CGT rates as UK residents on residential property: 18% on gains within the basic rate band, 24% on gains above it (from 2024–25 onwards — the higher rate was reduced from 28% to 24% in the March 2024 Budget). You are still entitled to your annual CGT exemption (£3,000 from 2024–25) unless you are a company.
Overseas Workday Relief
Overseas Workday Relief (OWR) is available to individuals who are non-domiciled in the UK and become UK resident — but it is also relevant for those leaving the UK who return temporarily or maintain split employment arrangements. From April 2025, OWR was significantly reformed as part of the shift away from the domicile regime. The new OWR:
- Is available for the first 4 years of UK residency (up from 3 under the old rules)
- No longer requires remittance — the relief applies to earnings for work done outside the UK regardless of where the money is banked
- Is based on the proportion of workdays performed outside the UK
For people leaving the UK, OWR is less directly relevant than for arrivals, but if you have a dual-location employment contract — partly UK, partly overseas — understanding how your UK employment days are taxed and whether any relief applies is important. Get advice if your employer is UK-based but you are working primarily from abroad.
Double Tax Treaties
The UK has double tax treaties with over 130 countries. These treaties determine which country has taxing rights over specific income types and provide mechanisms to avoid being taxed twice on the same income. Key points:
| Income type | Treaty position (general) |
|---|---|
| Employment income | Taxed in country where work is performed. If you work in both countries, income is apportioned. |
| Private pensions | Usually taxed only in the country of residence, but varies by treaty — check yours. |
| Government service pensions | Often taxed only in the UK regardless of where you live (civil service, military, NHS pensions). |
| State Pension | Typically taxed in both countries, with a credit in the country of residence for UK tax paid. |
| UK rental income | Always taxable in UK. Treaty may allow credit in country of residence to avoid double taxation. |
| Business profits | Taxed in country of residence unless you have a permanent establishment in the UK. |
The key step is to claim treaty relief correctly. For pension income, this typically means applying to HMRC for a "no tax" or "reduced tax" direction under the treaty. Without this, UK tax may be deducted at source and you will need to reclaim it — which takes time. Applications for treaty relief are made via the relevant HMRC form (e.g., form DT Individual for individuals claiming treaty benefits).
National Insurance — should you keep contributing?
National Insurance contributions (NICs) build your entitlement to the UK State Pension and certain contributory benefits. You need 35 qualifying years to receive the full new State Pension (£221.20/week in 2024–25). Each qualifying year requires 52 weeks of Class 1 or 2 contributions, or Class 3 voluntary contributions to fill gaps.
When you move abroad, you stop paying NICs automatically (unless you are sent abroad by a UK employer under a specific secondment arrangement). You can choose to pay voluntary contributions to maintain your record:
| Class | Who pays | Rate 2024–25 |
|---|---|---|
| Class 2 | Self-employed people working abroad who were self-employed in the UK before leaving | £3.45/week (£179.40/year) |
| Class 3 | All other non-residents who want to fill gaps voluntarily | £17.45/week (£907.40/year) |
Class 2 is significantly cheaper and worth applying for if you were self-employed in the UK before leaving. Class 3 is still often worth paying: one qualifying year at Class 3 costs around £907, but adds approximately £6.32/week to your State Pension for life — a payback period of under 3 years if you draw the pension for a typical period.
What if you have a UK property you are renting out and also keeping?
This is the most common situation: people leave the UK but retain a UK property, either renting it or leaving it vacant. The tax implications stack up:
- Rental income: Always UK taxable. Register under NRL scheme to receive gross rent. File Self Assessment annually.
- Future sale: UK CGT applies. Keep records of all capital expenditure (extensions, improvements — not repairs) as these reduce the taxable gain. Keep evidence of the property's value as at April 2015 if you owned it before that date.
- PPR clock stops once you move abroad permanently. The last 9 months of ownership will still qualify, but the gap between departure and sale accrues chargeable gain at your full ownership-period fraction.
- Inheritance Tax: UK property is always in the scope of UK IHT regardless of where you live or die. If you are moving abroad permanently and intending to sever UK ties, this is a separate planning area.
The common mistakes
These are the errors that come up repeatedly when people move abroad without proper planning:
1. Assuming leaving = non-resident
HMRC does not know you have left unless you tell them. P85 starts the process, but your residency status for tax purposes is determined by the SRT. Many people who move abroad in spring or summer find they remain UK resident for that entire tax year because they do not meet any automatic overseas test or the sufficient ties test goes against them due to family or accommodation in the UK.
2. Spending too many days in the UK
The number of UK days you can spend without becoming UK resident depends heavily on your ties. People who travel frequently between their new country and the UK for work or family often accumulate days faster than they expect. Keep a simple log. The day count and the tie categories are HMRC's primary audit tools.
3. Forgetting UK rental income on foreign returns
Most countries require you to declare worldwide income on your tax return, then give a credit for tax paid overseas. If you have UK rental income, it needs to appear on both your UK Self Assessment and your overseas return. Missing it on either creates an exposure.
4. Selling UK property without reporting within 60 days
As above — the 60-day CGT reporting deadline for UK property is automatic and mandatory. Your UK solicitor may or may not remind you. Do not rely on them to handle this.
5. Government service pension taxed at source
If you worked in the NHS, civil service, teaching, police, or armed forces, your pension is almost certainly a government service pension. Under most UK tax treaties, these are taxed only in the UK regardless of where you live. Moving to Spain or Portugal does not mean you can receive this pension free of UK tax — HMRC will continue to deduct PAYE. Budget accordingly.
6. Becoming non-resident and then triggering a UK CGT event
There used to be a technique of becoming non-resident and selling UK assets CGT-free. For UK property this is now fully closed. For other UK assets (shares, business assets), temporary non-residency rules apply: if you are non-resident for fewer than 5 complete tax years, gains on assets held before departure that you realise while non-resident are brought back into UK CGT in the year you return. The 5-year temporary non-residency trap is less discussed than UK property CGT but equally important.
Before you leave — the practical checklist
| Action | When |
|---|---|
| Check your NI record and fill any cost-effective gaps | As early as possible |
| Decide whether to keep or sell UK property before leaving | 3–6 months before departure |
| Register under the Non-Resident Landlord scheme (NRL1) if keeping and renting UK property | Before or shortly after leaving |
| Submit P85 to HMRC | On or shortly after departure |
| Ensure all Self Assessment returns are filed and liabilities paid | Before or on departure |
| Identify any government service pension and check treaty position | Before leaving |
| Apply for treaty relief on UK pension income if applicable | Once resident in new country |
| Set up a system to count UK days | From day of departure |
| Keep records of UK property capital expenditure | Ongoing |
| Take tax advice in both the UK and destination country if complex situation | Before leaving |
Summary
The UK tax system continues to apply to you after you leave — but in a much narrower way once you are properly non-resident. The key steps are: establish non-residency under the SRT, submit P85, claim split-year treatment on your return for the year of departure, and understand what UK-source income remains taxable. UK property creates two ongoing obligations — annual rental income reporting and CGT on eventual sale. National Insurance voluntary contributions are frequently worth paying to protect your State Pension entitlement.
The tax traps are avoidable with planning. Most people who get caught do so because they assumed departure was automatic, miscounted UK days, or missed a reporting deadline. The HMRC rules are fully documented — it is the ignoring of them, not their complexity, that causes the problems.