Leaving the UK: Tax Guide for Departing Residents (2026)

Leaving the UK involves more than packing your possessions — your tax affairs need careful attention both before and after departure. Done wrong, you could remain liable for UK taxes long after you’ve gone, or miss out on reclaiming overpaid tax.

This guide covers every significant tax consideration when you leave the UK.

Step 1 — Becoming Non-UK Tax Resident

The Statutory Residence Test

Your UK tax residency for the year you leave is determined by HMRC’s Statutory Residence Test (SRT). You do not automatically stop being UK tax resident the day you fly out.

Automatic Overseas Tests — If any apply, you are NOT UK tax resident:

• You spend fewer than 16 days in the UK (if you were UK resident in 1+ of the previous 3 years)
• You work full-time overseas (35+ hours/week on average) and spend fewer than 91 days in the UK, with fewer than 31 UK work days

Day-counting rules: A day counts for SRT purposes if you are in the UK at midnight. Days of travel count if you’re in the UK at midnight.

Key point for leavers: In your year of departure, you may still be UK tax resident for part of the year, with non-residence applying only from your departure date (subject to split-year treatment).

UK Ties That Can Retain Your Residency

Even after moving abroad, having UK ties can affect your residency status:

The fewer UK ties you retain and the fewer UK days you spend, the easier it is to become non-UK resident.

Step 2 — Split-Year Treatment on Departure

If you leave the UK partway through a tax year (6 April to 5 April), you may be able to claim split-year treatment.

What Split-Year Treatment Does for Leavers

Your tax year is divided into two parts:

• UK part — from 6 April to the date you leave; you pay UK tax as normal
• Overseas part — from departure date to 5 April; you’re treated as non-UK resident

This means income earned and gains made after your departure date are not UK taxable — even though technically you’re still in the same tax year.

Cases That Apply to Leavers

The most common case for UK leavers:

• Case 1: You leave to work full-time overseas (at least 35 hours/week, under 31 work days in UK, under 91 UK days)
• Case 3: You leave to live abroad permanently (ceased to be UK resident, have no UK home by end of year)

To claim: File a Self Assessment tax return including SA109 (Residence) supplementary pages. Actively elect for the appropriate case.

Step 3 — Completing a P85

A P85 form notifies HMRC that you’re leaving the UK. This triggers a tax repayment calculation for any overpaid PAYE in the year of departure.

Complete a P85 if:

• You’re leaving and won’t be working in the UK
• You want HMRC to calculate your final PAYE position for the year

How to submit: Online at gov.uk/government/publications/income-tax-leaving-the-uk-getting-your-tax-right-p85 or by post to HMRC.

What you’ll need:

• P45 from your last UK employer
• Details of any UK income after departure (rental, interest, dividends)
• Your new overseas address

HMRC will send a tax calculation and refund any overpaid tax.

Step 4 — Capital Gains Tax on UK Property

Non-Resident CGT (NRCGT)

If you own UK residential property and sell it while non-UK resident, you still pay UK Capital Gains Tax on the gain.

Rates (2026/27):

The 60-day reporting rule: You must report any UK property disposal and pay any tax due within 60 days of completion. This applies even if:

• The gain falls within the CGT annual exempt amount
• You make a loss
• You have no tax to pay

Method: Report via HMRC’s UK Property Reporting Service online: tax.service.gov.uk/report-and-pay-capital-gains-tax-on-uk-property

Failure to report within 60 days results in automatic penalties.

CGT on Other UK Assets

For non-UK-resident individuals, CGT on other UK assets (shares, etc.) generally does not apply. However:

• UK real estate (commercial property) is within scope
• If you return to the UK within 5 years, gains made while non-resident may be “rebased” and taxed on return (temporary non-residence rules)

Step 5 — UK Income as a Non-Resident

Once you’re non-UK resident, you may still receive UK-source income:

Non-Resident Landlord Scheme: If you keep UK rental property:

• You can apply to HMRC to have rent paid without UK withholding tax deducted
• Otherwise your letting agent must withhold 20% tax and pay it to HMRC
• File a UK Self Assessment return to reconcile rental income each year

Step 6 — ISAs After Leaving the UK

ISA interest in your new country: Most countries do not recognise the UK ISA’s tax-free status. Interest and gains earned inside the ISA may be taxable in your new country of residence. Check local rules.

Step 7 — Pension Considerations on Departure

UK Workplace Pension

Your UK pension pot remains yours. On departure you have several options eventually:

• Leave it invested in the UK scheme until you retire
• Transfer to a Qualifying Recognised Overseas Pension Scheme (QROPS) in your new country — though QROPS transfers come with an Overseas Transfer Charge (25%) in many situations since 2017
• Drawdown from UK scheme while resident abroad (many UK providers allow this)

See our QROPS Guide for full detail.

State Pension Abroad

You can claim your UK State Pension from abroad. In EU countries and certain others, it is uprated annually. In some countries (including Canada, Australia, New Zealand) it is frozen at the rate when you claimed or left the UK.

See our State Pension Abroad Guide.

Step 8 — National Insurance Contributions While Abroad

Every year of UK NI contributions builds entitlement to the State Pension. If you stop UK employment, NI contributions stop too — creating gaps in your NI record.

Can I Pay Voluntary NI from Abroad?

Yes. You can make voluntary contributions:

Class 2 is significantly cheaper — if you were employed or self-employed before leaving, use Class 2.

Is It Worth It?

At £3.45/week (Class 2), filling a one-year NI gap costs approximately £179. The State Pension is worth approximately £221.20/week for a full pension (35 qualifying years). Each year added is worth approximately £6.32/week for life.

If you’re 5 years short and have 30+ years in retirement, buying voluntary years is almost always worthwhile.

Apply via HMRC: gov.uk/voluntary-national-insurance-contributions

You can also check your NI record and State Pension forecast at: gov.uk/check-state-pension

Departure Tax Checklist

Related Guides

• Moving to the UK: Tax Guide for New Residents
• Double Taxation Treaties: UK Guide
• QROPS: Transferring Your UK Pension Abroad
• UK State Pension if You’ve Lived Abroad