Most UK citizens moving abroad have a lot on their plates: adjusting to new living costs, housing, and day-to-day life in a new country. The last thing on their minds: their ongoing UK tax obligations.
A lot of the time, it’s only when income is questioned or an unexpected tax bill arrives in the post that they realise their tax position isn’t as straightforward as they thought. Out of sight definitely doesn’t mean out of mind for UK tax authorities.
The best time to get your tax positions sorted is right after you make the move. It takes a little time to get everything in order, but once you do, you can settle in knowing your tax is correct and set up in the most efficient way possible.
This guide will walk you through how to get your expat tax planning right for your move abroad.
Determine Your Tax Residency
When you move abroad, your UK tax obligations don’t automatically stop. Your residence status affects how everything is taxed – from employment income and rental profits to pensions like the UK State Pension.
This is decided using the Statutory Residence Test, which looks at the following:
How Many Days You Spend in the UK
HMRC uses firm day limits. For example:
You’re automatically non-UK resident if you spend fewer than 16 days in the UK in a tax year (or fewer than 46 days if you haven’t been a UK resident in the previous three tax years), provided you also have fewer than four “sufficient ties” to the UK under the Statutory Residence Test.
You’re usually UK resident if you meet any of HMRC’s automatic residence tests, including:
- Spending 183 days or more in the UK during the tax year
- Having a home in the UK for 91 consecutive days or more (with at least 30 of those days falling in the tax year), and spending at least 30 days there, while either:
- Having no overseas home, or
- Having overseas homes but spending fewer than 30 days in each of them
- Working full-time in the UK for 12 months or more, where most of your working days (over 75%) are spent working in the UK
If none of these automatic residence tests apply, HMRC then looks at the “sufficient ties” test to decide your residency status.
Whether You Work in the UK
If you keep doing UK work after moving abroad, it can keep you classified as a UK tax resident. What counts as “work”? If you work in the UK for 40 days or more in a tax year (with each workday being 3 hours or more), then you technically qualify as a tax resident.
Whether You Have Strong Ties in the UK
If you don’t meet the automatic tests under the Statutory Residence Test (SRT), HMRC then looks at how closely connected you still are to the UK.
The more UK ties you have (and the more days you spend here) the greater chance you’ll be classed as a UK tax resident again for that tax year.
HMRC looks at a few different things when assessing your UK tax residency, including:
- A home available to you in the UK (whether owned, rented, or regularly used – and whether you remain liable for council tax)
- A spouse, civil partner, or long-term partner living in the UK
- Children living in the UK (with specific rules around education and visit days
- Time spent in the UK in previous tax years – particularly if you were recently UK resident
If you’re still considered a UK tax resident after moving abroad – but you’re also treated as a tax resident in your new country – you could end up being taxed twice on the same income. Thankfully, there are ways to avoid this.
Let HMRC Know You’re Leaving the UK
IIt’s very important that you officially tell HMRC that you’ve left the UK after you arrive in your new home. They can then formally update your tax status and apply the correct rules going forward.
You usually do this by:
- Complete the ‘residence’ section (Form SA109) and send it by post. You cannot use HMRC’s online services to tell them you’re leaving the UK
- Submitting Form P85 if you don’t normally complete a tax return
Keep in mind, if you don’t notify HMRC, they may continue treating you as a UK resident by default, which can lead to overpaying on tax bills.
Claim Available UK Expat Tax Reliefs
The good news is, there are plenty of legal ways to reduce your UK tax when moving overseas.
The Personal Allowance (Even After You Leave)
You don’t lose your £12,570 tax-free allowance the moment you board the plane. In fact, if you hold UK citizenship (or are an EEA citizen), you’re usually entitled to the UK Personal Allowance for life – even after moving abroad.
This is incredibly helpful because it can wipe out the tax on the first £12,570 of UK rental income or UK pension payments every single year. You just have to claim it via your tax return or a Form R43 (Claim Personal Allowances and Tax Refunds if You Live Abroad).
Double Taxation Agreements (DTAs)
If you’re taxed on the same income in both the UK and your new country of residence, you can usually claim Double Taxation Relief.
The UK has deals with over 130 countries to make sure you aren’t taxed twice on the same money. This includes:
- Employment income
- Rental income
- Pensions
- Investment income
In most cases, if you’ve already paid tax abroad, you can offset that amount against your UK tax bill. Normally, you’ll only pay the higher of the two tax rates – not both combined.
DTAs include “tie-breaker” rules for situations where both countries treat you as a tax resident.
These rules are used to decide where you’re officially resident for tax purposes and usually look at:
- The country where you have a permanent home available to you, even if you don’t own the property.
- Where your permanent home is
- Where your personal and economic life is mainly based
Other tests:
If your tax residence isn’t clear from where your permanent home is or where your personal and economic life is mainly based, further tests are applied.
- Habitual abode: You’re considered resident in the country where you normally live most of the time. If you have a habitual abode in both countries (or in neither) the final test is used.
- Nationality: You’re considered resident in the country of which you are a national.
When none of the tests give a clear answer
In rare cases, these tests may still be inconclusive (for example, if someone has dual nationality or no nationality). When this happens, the tax authorities of both countries will usually determine your residence status through mutual agreement.
Split Year Treatment
When you move abroad, HMRC often allows you to draw a line in the sand on the day you leave. This is called Split-Year Treatment, and it’s one of the most useful tools for expats.
Instead of being taxed as a UK resident for the full 12 months, your year is split into two halves:
- The UK Part: You pay tax as a resident only on the income you earned before you left.
- The Overseas Part: From the day you depart, you’re treated as non-resident. This means any salary or foreign investment income you earn in your new country stays entirely outside the UK tax net.
Do You Qualify?
Claiming split year treatment requires a legal test. While there are several specific scenarios (HMRC calls these cases), you generally qualify if you:
Make a clean break from your UK home
One way to qualify for split year treatment is by fully giving up your UK home and moving abroad to live there long-term.
This usually applies if:
- You were UK tax resident this year and last year
- You leave the UK and no longer have a home here for the rest of the tax year
- You become non-UK resident in the following tax year
From the point you give up your UK home, you must also:
- Spend fewer than 16 days back in the UK
- Settle abroad within 6 months – either by becoming tax resident there, living there consistently, or having your only home (or main homes) in that country
Start a new chapter
Another common way to qualify for split year treatment is when you move overseas to work full-time or properly settle there long term.
This usually applies if:
- You were UK tax resident this year and last year
- You start full-time work abroad (roughly 35 hours a week on average)
You become non-UK resident in the following tax year
While working overseas, HMRC expects to see a genuine move – not a commute back and forth. That means:
- No long breaks from your overseas job (apart from normal holiday, sickness, or parental leave)
- Very limited UK work – no more than 3 hours a day on a small number of days
- Very limited time spent back in the UK overall
This can include moving abroad under:
- A work or employment visa
- Permanent residency
- A long-term or retirement visa
Keep your visits short
You don’t spend more than a handful of days back in the UK after your official departure date. In most cases, HMRC expects this to be fewer than 16 days in the UK during the overseas part of the tax year.
Non-Resident Landlord Scheme (UK Property Income)
If you plan to keep your UK rental property after moving abroad, this one’s for you. Under this scheme, you can:
- Receive rental income without tax being withheld
- Deduct allowable expenses
- Pay only the correct amount of UK tax through your return
When done properly, this usually means a much smaller UK tax bill on your rental income.
Note: non-resident landlords who wish to receive their rental income with no tax deducted must apply for approval to HMRC.
Capital Gains Exemptions for Non-Residents (When Applicable)
Once you’re no longer classed as a UK tax resident, the UK will usually stop taxing gains on most assets you sell overseas.
This can open up a window where selling foreign investments, businesses, or overseas property becomes far more tax-efficient than it would have been while you were UK resident.
But UK property is different.
Even if you’re non-resident, you still have to pay UK Capital Gains Tax (CGT) on profits from selling UK land or property.
For other UK assets (like shares in UK companies), you normally won’t pay UK CGT unless:
A company is considered UK property-rich if 75% or more of its asset value is UK land or property.
You return to the UK within 5 years of leaving (the temporary non-residence rule)
You sell shares in a company that is classed as UK property-rich
Specialist UK Tax Help for British Expats Abroad
Moving abroad is a big adjustment. Dealing with tax on top of everything just piles on the pressure.
The Expat Taxes team specialises in helping people who’ve left the UK understand their unique tax position, get everything properly updated with HMRC, and make sure they’re claiming every relief and exemption they’re entitled to.
Whether you’ve just arrived overseas or are planning your move, we’re here to help you get it all sorted.
Book a consult with Expat Taxes UK for personalised expat tax support.
P.S. By booking a consultation, you’ll receive a £100 credit that can be applied to any future services – including UK tax return preparation – so you can start saving straight away.
DISCLAIMER: The material in this article is for general information purposes only and does not constitute legal or taxation advice. Legal, financial, investment and taxation advice should be sought before acting or refraining from acting. All information and taxation rules are subject to change without notice. Expattaxes.co.uk Limited accept no liability for any action taken based on the information in this article or any of the articles on this website.
