Leaving the UK: tax advice before you move

The UK does not levy an immediate exit tax or deemed departure charge on capital gains for individuals moving overseas. However, under the 5-year Temporary Non-Residence rule, if you return to the UK within five full tax years, gains realised on assets owned prior to leaving become taxable in the UK in the year of your return.

If you left UK employment mid-tax year, you likely overpaid PAYE income tax based on a full 12-month Personal Allowance. You can submit Form P85 to HMRC to claim your tax refund. However, if you are already registered for Self Assessment or have continuing UK rental income, the refund is claimed directly via your annual Self Assessment return with form SA109.

Under Split-Year treatment (Cases 1, 2, or 3 of the Statutory Residence Test), the tax year is divided into a UK resident part and an overseas non-resident part. This ensures foreign employment income and foreign gains arising after your departure date are completely protected from UK income tax.

You can keep your existing UK ISAs and SIPPs invested, and they will continue to grow free of UK tax. However, you cannot make new cash or share contributions to an ISA once you are non-UK resident (from the start of the tax year in which you are non-resident), unless you are a Crown employee or spouse of one.

If you do not meet the automatic overseas tests, HMRC assesses five sufficient ties: Family Tie (UK-resident spouse/minor children), Accommodation Tie (accessible UK home for 91+ days), Work Tie (40+ UK workdays of 3+ hours), 90-Day Tie (90+ midnights in either of the previous two tax years), and Country Tie (more midnights in the UK than any other country). The number of ties dictates your maximum permitted UK visit days.

The burden of proof rests entirely on the taxpayer. You should maintain contemporaneous records including flight boarding passes, passport stamps, overseas employment contracts, residential leases or utility bills abroad, and credit card receipts proving your physical presence overseas. Detailed day-count logs showing midnight locations must be retained for at least six years.

Spending 183 or more midnights in the UK during a tax year makes you automatically UK tax resident with no exceptions. If you spend between 91 and 182 days, your residence status depends on how many sufficient ties you have and whether you were resident in any of the prior three years. Exceeding your permitted threshold makes you liable to UK tax on your worldwide income.