Leaving the UK: Tax Planning for Moving Abroad
Whether you are moving abroad for work, setting up a business overseas, or retiring in the sun, the way you leave the UK shapes your tax position for years. The time to plan is before you go.
Leaving the UK does not end your relationship with HMRC, it changes it. From the date you become non-resident, a different set of rules applies to your income, your gains, your pensions, and your estate. Whether you are relocating for a job, launching a venture overseas, or retiring abroad, the decisions you make before departure, and how long you stay away, determine how much UK tax follows you.
Becoming Non-Resident and Split Year Treatment
Your UK residence status is determined by the Statutory Residence Test (SRT), the same test that applies on arrival. Simply moving abroad does not automatically make you non-resident, day counts, work patterns, and your remaining UK ties all matter. In the year you leave, split year treatment may divide the tax year into a UK part and an overseas part, so you are taxed as a UK resident only up to your departure. Different split year cases apply depending on why you are leaving, including starting full-time work overseas and ceasing to have a UK home. We review the date you become non-resident, confirm which split year case applies, and make sure the right entries are completed, whether that is the residence pages of your Self Assessment return or form P85 where a return is not otherwise required.
Temporary Non-Residence: The Five-Year Rule
A short spell abroad will not shelter gains and certain income from UK tax. Under the temporary non-residence rules, if you have been UK resident in enough of the years before you leave and then return within five years, income and gains you realised while non-resident can be pulled back into UK tax in the year of your return. This catches people who leave, crystallise a large gain or pension withdrawal abroad, and come back too soon. Planning the length and timing of your absence is often the single most valuable step in a departure.
What Stays Taxable in the UK After You Leave
Non-residence removes most of your foreign income and gains from UK tax, but UK-source items generally remain within the net. UK rental profits continue to be taxable, typically under the Non-Resident Landlord Scheme. Gains on UK residential and commercial property remain chargeable to non-resident capital gains tax, with a 60-day reporting and payment deadline. UK pensions and income from UK duties may also stay taxable, subject to the Double Taxation Agreement between the UK and your new country of residence. We map exactly what remains in scope and where treaty relief applies.
Inheritance Tax After Leaving: The Long-Term Resident Tail
From 6 April 2025, inheritance tax moved from a domicile basis to a residence basis. If you have been UK resident for 10 of the last 20 years you are a Long-Term Resident, and your worldwide estate stays within the UK inheritance tax net for a period after you leave, the "tail", which runs for between three and ten years depending on how long you were resident. Leaving the UK does not switch off UK inheritance tax overnight. We model your tail, advise on when your worldwide estate falls out of scope, and coordinate with your estate planning in your new home.
Frequently Asked Questions
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