UK tax when you leave the United Kingdom: with rates, forms and residence tests

Leaving the UK (or returning to live in the UK after a spell abroad) raises complex tax issues for income tax, dividends, self-employment, capital gains, and residence.

Poor planning can result in unexpected tax bills, missed reliefs, or double tax. It is vital to understand: (i) your UK residence status under the Statutory Residence Test (SRT) (ii) the relevant tax rates and forms (iii) what happens during the UK-resident part of the year vs the non-resident part under split-year treatment (iv) what happens on your return to the UK (including CGT on assets realised abroad) and (v) how dividends from your own UK company are treated when you leave.

Here are the key components.

Why people leave the UK – statistics & commentary

While comprehensive data on departures purely for tax reasons is limited, the following is relevant:

• The UK’s net migration (arrivals minus departures) reached 906,000 in the year ending June 2023

• A report by the Tax Justice Network found that claims of a massive “non-dom exodus” from the UK are exaggerated; HMRC data suggest departures of non-doms are in line with or below expectations.

• A survey by tax adviser Cornerstone Tax found 21% of respondents said higher taxes had prompted them to consider “cutting ties” with the UK.

While not all departures are tax-driven, the data signals that tax considerations are increasingly part of the decision.

Residence status: automatic UK tests, automatic overseas tests and sufficient ties

Under the SRT (introduced with effect from 6 April 2013) you determine your UK residence for each tax year by applying (1) automatic overseas tests (if you meet one you are automatically non-resident) (2) automatic UK tests (if you meet one and no automatic overseas test applies, you are automatically resident) (3) if neither applies, the sufficient ties test.

Automatic UK tests

You are automatically UK resident in a tax year if you meet any of these:

Automatic overseas tests

You are automatically a non-UK resident in the tax year if you meet any of the following:

Sufficient ties test

If neither automatic test applies, you assess your “ties” to the UK (family tie, accommodation tie, work tie, 90-day tie, country tie) and the number of UK days to determine residence. Eight common “cases” of residency / non-residency

In practice, advisers refer to eight “cases” for split-year treatment or departure. One example: Case 8 (returning to the UK), where the UK part of the year is from when you move into a UK home

Income tax while UK resident vs non-resident (and split-year treatment)

UK-resident part of the year

Once you are UK resident for tax purposes, you are generally liable to UK tax on your worldwide income (salary, self-employment profits, interest, dividends, overseas income) even if paid abroad

Income tax bands and rates for 2025/26 (England, Wales, Northern Ireland.

Dividend tax rates (2025/26) (after £500 dividend allowance)

Self-employment/salary income follows the normal rates above. Interest/savings income may attract tax at the rates above once allowances are used.

Non-resident (non-UK resident) part of the year

If you leave the UK and become non-resident (and meet the automatic overseas test or sufficient ties test), you will normally only pay UK tax on your UK-source income (for example UK rental income, UK pensions, UK company dividends) and not on your foreign income.

Split-year treatment

If you cease UK residence part-way through a tax year, you may qualify for split-year treatment so only the UK-resident portion of the year is taxed on worldwide income. The non-resident portion is taxed only on UK-source income.

Dividends from your own UK limited company

If you own a UK company and receive dividends during a year when you qualify for split-year treatment (having left the UK part-way through the year), you must be aware that the dividend payment for the whole tax year may still be subject to UK tax as part of your UK resident status, depending on timing of the dividend and your residence status at the payment date.

Dividends are taxed at the UK resident rates above (8.75%/33.75%/39.35% after the £500 allowance). Regardless of split-year treatment, if the dividend is paid while you are resident, UK tax applies on the whole amount, unless specific treaty relief applies or the dividend arises after you have become non-resident and no UK-resident company involvement remains.

Your UK tax liability depends fundamentally on whether you’re classified as UK resident or non-resident under the Statutory Residence Test (SRT). This test, introduced from 6 April 2013, determines your tax residence status for each tax year by applying three sequential tests.

The SRT applies in a specific order. You first check the automatic overseas tests to see if you’re automatically non-resident. If none apply, you then check the automatic UK tests to see if you’re automatically resident. Only if neither automatic test applies do you move to the sufficient ties test, which examines your connections to the UK alongside the number of days you spend here.

Automatic UK Residence Tests

You’re automatically UK resident for a tax year if you meet any of these conditions, unless you first meet an automatic overseas test:

You spend 183 days or more in the UK during the tax year. Days are counted using the midnight rule, so if you’re present in the UK at midnight, that counts as a UK day. Your only home is in the UK for at least 91 consecutive days during the tax year, and you’re present in that home for at least 30 days during the year. The “only home” test requires careful analysis, as having any overseas home (even if you rarely use it) can disqualify you from this test.

You work full-time in the UK for any 365-day period, with at least one day falling in the tax year, and there are no significant breaks from UK work. Full-time work means averaging at least 35 hours per week, with precise criteria detailed in HMRC guidance.

Automatic Overseas (Non-Residence) Tests

You’re automatically non-UK resident if any of these apply:

You were UK resident in one or more of the previous three tax years and spend fewer than 16 days in the UK during the current tax year. If you weren’t UK resident in any of the previous three years, this threshold increases to fewer than 46 days. This test allows very brief visits to the UK without triggering residence.

You work full-time overseas throughout the tax year (at least 35 hours per week on average), with no significant breaks of more than 30 days, and you spend fewer than 91 days in the UK during the year, of which no more than 30 are working days. This test specifically targets people who’ve genuinely relocated for overseas employment. Detailed criteria for full-time work overseas are set out in HMRC manuals.

You left the UK to work full-time overseas and continue to do so, spending fewer than 16 days in the UK (or fewer than 46 days if you weren’t resident in any of the previous three tax years).

Sufficient Ties Test

If neither automatic test determines your status, you must apply the sufficient ties test. This examines five potential UK ties and compares them to the number of days you spend in the UK to determine residence.

The five ties are: Family tie (your spouse, civil partner, or minor children are UK resident), Accommodation tie (you have UK accommodation available to you and spend at least one night there during the year), Work tie (you work in the UK for 40 or more days, where a working day means three or more hours of work), 90-day tie (you spent more than 90 days in the UK in either of the previous two tax years), and Country tie (you spend more days in the UK than in any other single country, only applicable if you were UK resident in one or more of the previous three years).

The number of ties needed to make you resident depends on how many days you spend in the UK and whether you were UK resident in any of the previous three tax years. For instance, if you were previously UK resident and spend 120 days in the UK, having three or more ties makes you resident; if you weren’t previously resident, you’d need four ties. Detailed tables showing tie thresholds are available in HMRC’s manual.

Split-Year Treatment: How It Works

Split-year treatment is one of the most valuable reliefs available when leaving or arriving in the UK mid-year. Rather than being treated as either fully UK resident or fully non-resident for the entire tax year, split-year treatment divides the year into two distinct periods with different tax treatments.

There are eight specific cases in which split-year treatment applies, as defined in detail by HMRC. The most common reasons for people leaving the UK are Case 1 (starting full-time work overseas), Case 2 (accompanying a partner who starts full-time work overseas), and Case 3 (ceasing to have a home in the UK).

Case 1: Starting Full-Time Work Overseas

If you leave the UK to start working full-time overseas (at least 35 hours per week on average), you may qualify for split-year treatment. The UK part of the tax year runs from 6 April until the day before you start your overseas employment. From your overseas work start date until 5 April, you’re treated as a non-resident.

During the UK-resident period, you’re taxed on your worldwide income as normal. During the overseas period, you’re taxed only on UK-source income such as UK rental income, UK pensions, or UK company dividends. This can create substantial tax savings, particularly if you earn significant foreign employment income or overseas investment income.

Case 3: Ceasing to Have a Home in the UK

This case applies when you give up your UK home and either acquire a home overseas or have no home anywhere. The split date is usually when you cease to have your UK home, though precise rules depend on when you acquire an overseas home and when you leave the UK. Case 3 is particularly relevant for people who sell their UK property before emigrating or who end a UK tenancy.

Case 8: Returning to the UK

For people arriving or returning to the UK, Case 8 is the most common. The UK-resident period begins when you arrive in the UK and move into a UK home that becomes your only or main home. Before that date, you’re treated as a non-resident for the tax year.

Capital Gains Tax (CGT) and returning to the UK

Capital Gains Tax (CGT) rates (2025/26

Temporary non-residence / return within 5 years

If you leave the UK and become non-resident, but return within 5 tax years, disposals you made while non-resident of assets held prior to departure may become taxable in the UK in the tax year you return. rossnaylor.com
For example: you leave on 1 July 2025, qualify for split-year treatment and are non-resident; you sell an overseas asset in 2027; if you return to the UK in 2028/29 you may still owe UK CGT in that year on the gain realised while non-resident.

Returning to the UK after more than five years

If you remain non-resident for more than five tax years and then return, gains realised while non-resident may fall outside UK CGT (depending on the asset type and whether UK trade assets etc).

Tax implications of moving to the UK

If you move back to the UK or become a UK resident again, you will become liable to tax on worldwide income once resident.

If you were a non-resident and a return, you must check whether the temporary non-resident rules apply (see above) and whether any of your gains or income generated while non-resident are brought into UK tax. The new FIG regime (from 6 April 2025) for those who have been non-resident for at least 10 years introduces relief on foreign income and gains for up to 4 years after returning.

Forms, deadlines and key dates

How to Claim Your Tax Refund: Step-by-Step Guide

If you’ve worked in the UK and are now leaving, you may be entitled to a tax refund. The primary way to claim this is through Form P85, which notifies HMRC of your departure and triggers a review of your tax position for the year.

Before You Start: Documents You’ll Need

Gather these essential items before beginning your P85 claim:

• Your P45 form from your UK employer (parts 2 and 3)
• Your National Insurance number
• Your new overseas address and contact details
• Start and end dates of your UK employment
• Details of all UK employers during the tax year
• Dates you were present in the UK during the tax year
• Information about any UK income you’ll continue to receive after leaving (such as rental income or pensions)

If you’ve lost your P45, contact your employer for a replacement or ask them to provide a statement of your earnings and tax paid for the year.

How to Complete Form P85 Online

Section / Step	What to prepare	Key details to include	Why it matters
How to submit	Government Gateway login	Use HMRC’s online P85 service (sign in with your Gateway account)	Fastest route; online form guides you through all sections
Personal details	ID & contact info	Full name, NI number, date of birth, email/phone; current UK address (if any) and new overseas address	Ensures HMRC can verify you and contact you after departure
Employment information	P45(s) and employer info	Employer name(s), PAYE ref, leaving date(s), year-to-date pay and tax; include all UK employments in the tax year	Calculates final UK liability and any refund due
Departure details	Travel dates & destination	Exact date you left/will leave the UK; country you’re moving to	Affects Statutory Residence Test outcome and split-year treatment
Future UK income	Details of ongoing UK sources	UK rents, UK pensions, UK company dividends, other UK-source income after leaving	Determines if you’ll need UK returns and how tax will be collected
Overseas employment	New job contract/offer	Overseas employer name, role, and start date	Helps HMRC assess non-residence (e.g., full-time work abroad)
Bank details (refunds)	Bank account info (when available)	From Autumn 2025: details for bank transfer refunds; until then, refunds via cheque	Speeds up international refunds once bank transfers are enabled
Review & keep records	Copies of forms/docs	Check accuracy before submitting; save a copy of the P85 and supporting evidence	Avoids delays/queries; supports residence position later

How to Complete Form P85 by Post

If you prefer to submit by post or can’t access the online service, download and print Form P85 from the HMRC website. Complete it following the same sections as above, using black ink and capital letters for clarity.

Attach parts 2 and 3 of your P45 to the form (keep part 1A for yourself). If you don’t have your P45, include a covering letter explaining why and provide as much employment information as possible.

Post your completed form to: HM Revenue and Customs, Pay As You Earn, BX9 1AS, United Kingdom. Send it by tracked mail if posting from overseas to ensure it arrives safely.

What If You’ve Already Left the UK?

You can still submit Form P85 after you’ve already moved abroad. There’s no penalty for late submission, although it’s best to file as soon as possible to trigger your refund. If you left the UK more than four years ago, however, you may be outside the time limit for claiming a refund, as HMRC generally allows four years from the end of the relevant tax year to make a claim.

Who Should NOT Complete Form P85

Form P85 is designed for employees leaving the UK. You should not use this form if you:

• File Self Assessment tax returns (you’ll report your departure via Form SA109 instead, though you may still complete P85 if you need an NT tax code for UK income)
• Are you leaving the UK temporarily for a holiday or a short business trip
• Work for yourself as a sole trader or through your own limited company (use Self Assessment instead)
• Are a student taking a gap year or study period abroad, but plan to return within the tax year

Suppose you’re self-employed or have complex tax affairs including property income, trading income, or significant investment income. In that case, you’ll need to complete a Self Assessment tax return instead of or in addition to Form P85.

Understanding Your Tax Refund: Real Examples

To help you estimate what you might reclaim, here are three typical scenarios showing how refunds are calculated.

Example 1: Employee Leaving Mid-Year

Sarah worked as a marketing manager in London from 6 April 2024 until 30 September 2024, when she moved to Australia for a new job. During those six months, she earned a gross salary of £ 30,000. Her employer deducted £3,486 in tax (calculated as if she would earn £60,000 for the full year, which would place her partly in the higher rate band).

However, Sarah’s actual income for the UK tax year was only £30,000. Against this, she’s entitled to her full personal allowance of £12,570, meaning only £17,430 is taxable. At the 20% basic rate, her correct tax liability is £3,486. But because she also qualifies for split-year treatment (leaving to work full-time overseas), her UK-resident period runs only from 6 April to 30 September. For this period, her tax liability would be recalculated based on her actual earnings and residence status.

Upon reviewing Sarah’s P85, HMRC calculates she was overtaxed by approximately £1,200, which they refunded to her within eight weeks of receiving her correctly completed form.

Example 2: Seasonal Worker Returning Home

Marco came to the UK from Italy on 15 May 2024 to work in hospitality for the summer season. He earned £8,000 gross before returning home on 31 August 2024. His employer deducted £800 in tax using a temporary tax code.

Because Marco’s UK income of £8,000 falls entirely within his personal allowance (£12,570), he should have paid no UK tax at all. By completing Form P85 and demonstrating he left the UK permanently, Marco received a full refund of £800 from HMRC approximately ten weeks after submission.

Example 3: Returning Home with Split-Year Treatment

Priya worked in the UK for three years before returning to India on 15 October 2024 to start a new role. She earned £45,000 for the full tax year (£26,250 during the UK-resident period from April to October, and £18,750 allocated to the non-resident period, though this was actually paid while she was still UK resident).

Under split-year treatment, Priya is taxed as UK resident only from 6 April to 14 October 2024. For this period, she earned £26,250. After deducting her personal allowance (£12,570), her taxable income is £13,680, resulting in a tax liability of £2,736 at 20%.

However, her employer deducted tax throughout the year as if she were resident for all twelve months, withholding approximately £6,486 in total. HMRC reviews her case, confirms split-year treatment applies (Case 3: ceasing to have a UK home), and refunds her approximately £3,750.

These examples show how significant refunds can be, particularly when split-year treatment applies or when you’ve earned below the personal allowance threshold.

Receiving Your Tax Refund

After HMRC processes your P85 and confirms you’re due a refund, understanding how and when you’ll receive your money is important, especially if you’re already living overseas.

How Long Does It Take?

Most HMRC tax refunds take between six and twelve weeks to process from the date they receive your correctly completed form. Processing times can be longer during peak periods (typically January to April when Self Assessment returns are filed) or if HMRC needs additional information from you.

Several factors can delay your refund. If your P45 information doesn’t match HMRC’s records, if you had multiple employers during the year, if you need to claim split-year treatment, or if HMRC selects your case for additional verification, expect processing to take longer. Missing information on your form will definitely cause delays, so complete every section carefully.

Payment Methods: Cheques and Future Bank Transfers

Currently, HMRC issues all P85 refunds by cheque posted to your overseas address. This can be inconvenient and costly, as many overseas banks charge substantial fees to process sterling cheques (often £20-£50 or more) and the process can take several additional weeks.

Your overseas bank may agree to cash a pound sterling cheque, but this is unusual and typically incurs a fee. More commonly, you’ll need to either maintain a UK bank account to deposit the cheque or arrange for someone in the UK to handle it on your behalf.

Good news is coming: HMRC is introducing bank transfer facilities for P85 refunds in Autumn 2025. This will allow you to provide international bank details and receive your refund directly, avoiding cheque-handling problems entirely.

Using a Nominee or Agent

If you close your UK bank account before receiving your refund cheque, or if you’re concerned about cheques going missing in international post, you can appoint a nominee. This is someone in the UK (a friend, family member, or professional tax agent) who can receive the cheque on your behalf, deposit it into their account, and then transfer the money to you.

To arrange this, contact HMRC in writing, explaining the nominee arrangement and providing their details. For professional agents, you’ll need to complete a 64-8 authorisation form giving them authority to act on your behalf.

What If Your Cheque Goes Missing?

International post is not always reliable. If your refund cheque hasn’t arrived within three months of HMRC confirming it was issued, contact them to request a replacement. You’ll need to provide your reference number and confirm your current address. HMRC will cancel the original cheque and issue a new one, though this adds further weeks to the process.

Checklist summary for someone leaving the UK

• Determine your UK residence status under SRT – check automatic overseas tests first, then UK tests, then sufficient ties.

• If leaving mid-year, check whether you qualify for split-year treatment.

• For the UK-resident period: account for income tax on salary, self-employment, interest, dividends (at rates above).

• For the non-resident period: UK tax only on UK-source income (rents, UK pensions, UK company dividends).

• If you receive dividends from your own UK company, be careful: UK resident status may trigger tax for the whole year even if you leave mid-year.

• If you dispose of assets while non-resident, check whether the 5-year rule applies on return.

• If you return to the UK, consider both the FIG regime (if applicable) and temporary non-residence rules for CGT.

• Submit the required forms (P85, SA109) by the deadlines, and ensure you’ve reported UK tax continuing-source income after departure (e.g., UK property, rental).

• Keep careful records of days in the UK, overseas home availability, travel/work days, and any overseas employment to support residence claims.

• Take professional advice on double taxation treaties, withholding, non-resident landlord schemes, CGT on overseas and UK property, and implications for your UK company dividends.

 

Common Mistakes to Avoid

Over the years, advising clients on UK exits, certain mistakes keep recurring. Avoiding these can save you thousands of pounds and significant stress.

Waiting Until After Leaving to Start the Process

Many people assume they can’t file Form P85 until after they’ve left the UK. In fact, you should complete and submit it as soon as you know your departure date, even if that’s several weeks or months in advance. An earlier submission means faster processing and faster refunds.

Not Keeping Copies of Submitted Forms

HMRC can take months to process forms, and postal applications sometimes go astray. Always keep copies of your completed P85, P45, and any supporting documents you submit. If HMRC claims they haven’t received your application, you’ll need these to resend or to prove submission dates.

Closing UK Bank Accounts Before Receiving Your Refund

If you close your UK bank account immediately after leaving, you’ll have no way to receive your refund except by international cheque, which is slow and expensive. Keep at least one UK account open until you’ve received your refund or until HMRC’s bank transfer facility launches in Autumn 2025. Alternatively, arrange a nominee to handle cheques on your behalf before closing accounts.

Not Notifying HMRC of Address Changes

If you move after submitting your P85, or if you move again within your first year abroad, notify HMRC immediately of your new address. Refund cheques sent to old addresses may never reach you, and replacement cheques add months to the process.

Assuming You Don’t Need to File If You’re Leaving

Some people believe leaving the UK means they no longer need to engage with HMRC at all. This is dangerous. If you have UK-source income, you may still need to file UK tax returns. If you owe UK tax, HMRC will pursue it regardless of where you live. Formally notifying HMRC of your departure protects you from estimated assessments and ensures your tax affairs are properly closed.

Overlooking Split-Year Treatment

Split-year treatment can save substantial amounts of tax, but it’s not automatic. You must identify that you qualify and claim it on your tax return. Many people either don’t realise they qualify or fail to complete the necessary forms, resulting in overpayment of UK tax. If you’re leaving to work full-time overseas or cease to have a UK home, research split-year treatment carefully.

Forgetting About the Four-Year Claim Deadline

HMRC generally allows four years from the end of the relevant tax year to claim a refund. If you left the UK in 2019/20, you must claim by 5 April 2024 (four years after the end of that tax year). Leave it too long and your right to a refund expires permanently, even if you overpaid by thousands of pounds.

Frequently asked questions abiout UK exit taxes

What forms must I complete when leaving the UK?
If you don’t file Self Assessment, complete Form P85 (include parts 2–3 of your P45). If you do, include the SA109 Residence pages with your tax return. Tell HMRC as soon as you leave — deadlines are 31 October (paper) or 31 January (online). (HMRC RDR3; ITA 2007 s. 7)

How does HMRC decide whether I’m UK tax resident or not?
The Statutory Residence Test (FA 2013 Sch 45) uses automatic UK tests, automatic overseas tests, and “sufficient ties.” You’re resident if you spend 183+ days here or have a UK home; non-resident if you work full-time abroad and spend < 91 days in the UK. (HMRC RDR3 Ch. 2–5)

What is split-year treatment, and how does it affect my tax?
Split-year treatment divides the tax year into a UK-resident part (taxed on worldwide income) and a non-resident part (taxed only on UK income). There are eight cases under RDR3, such as starting work abroad or returning to the UK. (ITA 2007 s. 830; HMRC RDR3 Part 3)

What income stays taxable in the UK after I move abroad?
You still pay UK tax on UK-source income — for example rent, pensions, and dividends from UK companies. Non-resident landlords must register under the NRL Scheme or have tax deducted at source. (ITA 2007 Pt 4 Ch 3A; NRLM02000)

What happens to dividends from my own UK limited company after I leave?
Dividends from a UK company remain UK-source income under CTA 2009 Part 9A. Even with split-year treatment, dividends declared while you’re UK resident are taxed for the whole year at 8.75%, 33.75% or 39.35%. (CTA 2009 s. 931A–F)

What are the Capital Gains Tax rules if I leave or return to the UK?
Non-residents pay CGT on UK property but not on foreign assets — unless they return within five years, triggering the temporary non-residence rule. CGT rates are 18% and 24%, with a £3,000 annual exemption. (TCGA 1992 s. 10A & s. 14D)

How many people are leaving the UK, and why does it matter for tax?
ONS data shows about 823,000 people left the UK in 2023 — mainly for work, study or retirement. Thousands notify HMRC each year via P85 or SA109 to secure refunds and avoid double tax. Failing to do so can mean over- or under-paying tax. (ONS LTIM 2024; HMRC Stats Table 11.1)

Bio: Simon Misiewicz

Simon Misiewicz is a senior tax adviser specialising in UK cross-border tax issues for high-net-worth individuals and business owners. With over 20 years’ experience advising on residence, non-residence, remittance basis, and international mobility, Simon has authored professional articles for accountancy and tax journals, lectures widely to advisers and is a guest lecturer at leading university postgraduate tax programmes. Simon provides input to HMRC on revisions to the technical guidance on the Statutory Residence Test and temporary non-residence rules.