UK Expatriate Taxation – leaving the UK

Are you a UK expatriate who has left or are planning to leave the UK? Are you looking for expatriate tax in the UK? If you time your departure early in the tax year you may be due a refund and can claim tax back.

By leaving early in the tax year, you are still entitled to a full UK personal allowance and this is used against your earnings for that short period. This often results in a tax refund simply because PAYE drip feeds your personal allowance over the whole tax year to calculate your monthly tax due. If you leave early you still have the rest of the allowance available to offset your income.

To claim this tax back you need to reassure HMRC that you have left the UK permanently and this generally means a stay away of more than 2 years. Complete a returning to uk tax form P85 and the Inspector of Taxes will normally issue a notice treating you as non resident from the day you leave. This is referred to as the split year treatment.

A split year means for your income to the date you leave you will be treated as resident and for the period after you leave you will be non resident.

As an expatriate, leaving the UK for this period you should seek advice on your exact situation to make sure you understand your tax position fully.

IMPORTANT : This article covers one useful scenario in respect of UK residency. The overall residency topic is under major revision through HMRC practice, legislation and case law so you should contact me to clarify your eligibility based on your exact circumstance.