The decision to leave the UK permanently or for an extended period is a significant life event — and, from a tax perspective, it is the beginning of a process rather than a clean break. The common assumption that leaving the country means leaving UK tax behind is wrong in important respects. UK tax obligations can persist for years after departure, and failing to manage them correctly creates unnecessary compliance risks and potential penalties.
This guide covers what you need to do with HMRC when you leave, what ongoing obligations persist, and how to set up your UK financial affairs for efficient management from abroad.
The P85: Notifying HMRC of Your Departure
The P85 is the form used to notify HMRC that you have left, or are leaving, the UK. It is specifically for individuals who have been taxed under PAYE (employed or receiving pension income) and are leaving the UK.
What it does: The P85 notifies HMRC that you are no longer (or are about to cease being) a UK resident. HMRC uses it to close your PAYE record with your employer, process any refund of tax you may be owed in your final part-year, and update your record to reflect non-resident status.
What it does not do: Filing a P85 does not formally establish your UK tax residency status. That is determined by the Statutory Residence Test (SRT), not by the act of filing the form.
How to submit: The P85 can be submitted online via your HMRC Personal Tax Account (www.gov.uk/personal-tax-account) or by post. If submitting by post, include your P45 (if applicable) and any supporting evidence of your departure date and new address.
When to file: HMRC recommends filing when you have left, or shortly after. There is no strict deadline, but promptness avoids delayed refunds and administrative complications.
Self-assessment filers: If you file a Self Assessment tax return, you do not use a P85 — instead, you complete the non-resident pages (SA109) on your next tax return, indicating your departure date and the basis on which you have become non-resident.
Establishing Non-Residence: The SRT Applies, Not the P85
Your UK tax residency status is determined by the Statutory Residence Test (SRT), which looks at days spent in the UK, the nature of your UK ties (family, accommodation, work, historical presence), and whether you meet the "full-time working abroad" test.
Filing a P85 does not establish SRT non-residence. It is possible to file a P85 and still be considered UK tax resident for the year (for example, if you have not met the SRT conditions for non-residence). Equally, HMRC may query your SRT position even after a P85 has been filed.
Key SRT principles for those leaving the UK:
- In the year of departure, you are likely to be "split-year" — UK resident for the period before departure, non-resident after. Split-year treatment applies automatically if the SRT conditions are met, and it means UK income and gains in the pre-departure period are taxed as UK resident; post-departure income may not be.
- The third automatic overseas test (full-time working abroad) is the route to immediate SRT non-residence for those who move abroad for employment. It requires working full-time overseas with no more than 30 UK workdays and fewer than 91 days in the UK in the tax year.
- If you do not meet an automatic test, non-residence may still be established via the "sufficient ties" analysis — but this requires care, particularly for those with families or homes remaining in the UK.
Notifying Your Employer and Payroll
Your employer's payroll will continue to deduct UK income tax under PAYE until you notify them and HMRC updates the tax coding. In the year of departure, HMRC will issue a revised tax code to your employer reflecting your part-year residency.
If you continue to receive UK employment income after leaving (for example, from UK clients as a consultant, or from a deferred bonus), HMRC's position on whether that income is UK-taxable depends on the nature of the income and your SRT status for the year.
The Non-Resident Landlord Scheme (NRLS)
If you own UK property that you let to tenants while living abroad, you are subject to the Non-Resident Landlord Scheme (NRLS).
Without NRLS registration: Your UK letting agent (or your tenant if you manage the property directly) is required to withhold 20% from your rental income and pay it to HMRC quarterly. The net rent only reaches you after this withholding.
With NRLS registration (form NRL1): Once HMRC approves your NRL1 application, your letting agent or tenant can pay your rent gross (without withholding). You then declare the rental income on your UK Self Assessment tax return and pay the tax directly.
The NRL1 should be submitted as soon as you know you are leaving the UK. HMRC approval typically takes 4–6 weeks. Until approval, withholding applies. (Withholding is refundable through the Self Assessment process, but it creates a cash flow delay.)
Ongoing UK tax on rental income: Non-UK residents who own UK letting property remain within the scope of UK income tax on that income, regardless of where they are resident. The UK-non-resident landlord rules continue until the property is sold.
Pension NT Tax Coding
If you receive income from a UK pension — defined benefit, defined contribution drawdown, annuity — the pension provider withholds UK income tax under PAYE unless you have an NT (No Tax) coding from HMRC.
An NT code means "deduct no tax at source." HMRC issues NT codes where the individual is non-UK-resident and the applicable double taxation agreement between the UK and the country of residence grants taxing rights on pension income to the country of residence rather than the UK. (Common DTA provisions: most DTAs grant the country of residence taxing rights over private pensions received by their residents.)
How to apply: Apply to HMRC's Centre for Non-Residents (Nottingham) with evidence of your non-UK residency and a copy of the relevant DTA provision. HMRC will update your tax code and notify your pension provider.
Important: Without an NT code, the pension provider will withhold UK tax, and you recover it by filing a UK Self Assessment return or through a DT-Individual (repayment) form. The NT coding avoids this delay.
ISA Accounts After Departure
ISA accounts do not close automatically when you leave the UK. Existing ISA accounts remain open and continue to hold their tax-advantaged status (no UK income tax or CGT on income and gains from the existing balance).
However, you cannot make new ISA contributions while non-UK resident. ISA contributions require UK residency. Any contribution made while non-resident is an invalid subscription — the ISA manager must refund it.
You also cannot open a new ISA while non-resident.
If you return to the UK, you can resume ISA contributions in the year you become UK resident again.
National Insurance: Voluntary Contributions
Your UK State Pension entitlement depends on your National Insurance contribution record. Each qualifying year of NI contributions adds to your State Pension entitlement (maximum: 35 qualifying years for the full New State Pension, £241.30 per week in 2026/27 — approximately £12,548 per year).
As a non-UK resident, you will not automatically build NI contributions (unless you are working for a UK employer on a UK contract). If you have gaps in your record, you can pay voluntary Class 3 NI contributions to fill qualifying years while abroad. The Class 3 rate for 2026/27 is £18.40 per week (approximately £956 per year for a full qualifying year).
Important change from 6 April 2026: The cheaper voluntary Class 2 NIC route — previously available to those living and working abroad — was abolished for periods of non-UK residence from the 2026/27 tax year. From April 2026, voluntary Class 3 is the only route available to most expats to fill State Pension gaps. This is a materially higher cost than the Class 2 route (which cost approximately £3.50/week in 2025/26) and changes the cost-benefit calculation for some individuals.
Transitional protection: Those who were already paying voluntary Class 2 contributions for 2024/25 or 2025/26 and submitted their application before 6 April 2026 may be able to apply for Class 3 contributions under the old three-year eligibility rules (rather than the new stricter 10-year UK residence or contributions test) — but must submit their Class 3 application before 6 April 2027. Seek advice from HMRC or a specialist if you were in the Class 2 scheme before April 2026.
Voluntary Class 3 contributions remain cost-effective for many individuals: each qualifying year adds approximately £6.90/week (£358/year) to the New State Pension for life. The payback period for Class 3 contributions is roughly 2.7 years of pension receipt — still favourable over a typical retirement horizon.
Backdating window: There is generally a 6-year backdating window for voluntary contributions, though this has been extended in specific circumstances. Check the current deadline with HMRC or the Department for Work and Pensions, as deadlines are subject to change.
Updating Wills and Beneficiary Nominations
Leaving the UK is a trigger event for reviewing your estate planning documents. Priorities include:
- Will: Update your UK will to confirm it remains valid and reflects your current wishes. Consider whether you need a local will in your new country of residence (for locally-sited assets).
- Pension death benefit nominations: Update nomination letters with UK pension providers to reflect your current wishes and beneficiaries.
- Life insurance: Confirm that existing UK life insurance policies remain in force from abroad, and consider whether additional international life cover is needed.
Ongoing UK Self Assessment
Many people who leave the UK remain within the UK Self Assessment system for several years after departure. You are required to file a Self Assessment return if you have:
- UK rental income
- UK employment or self-employment income
- UK pension income not covered by an NT code
- UK investment income above certain thresholds
- Capital gains on UK assets (including UK property, UK shares above the CGT annual exemption)
Non-resident returns include the SA109 (residence) supplementary pages, which establish your residency position and apply the appropriate split-year treatment or full non-resident rules.
HMRC's system for non-residents can be slow and occasionally unreliable. Appointing a UK tax agent or accountant experienced in non-resident returns — and giving them authorisation via form 64-8 — makes the ongoing compliance much more manageable from overseas.
Compliance Caveat
UK tax rules for departing residents are complex and depend on individual circumstances — including the SRT position in the year of departure, the nature of UK income sources remaining after departure, and the applicable double taxation agreement with the new country of residence. Rules change: the non-dom reforms of 2025, the pension IHT changes effective 2027, and ongoing changes to HMRC's administrative processes are just three examples. This article reflects the general position as understood in mid-2026. You should seek specific advice from a UK tax adviser before and immediately after leaving the UK.
How Global Investments Can Help
Leaving the UK is one of the most financially significant transitions you can make. Done well, it opens opportunities for tax-efficient wealth building that are not available to UK residents. Done poorly, it leaves a tail of compliance problems, missed tax savings, and unnecessary costs.
Global Investments specialises in helping internationally mobile clients manage the UK tax and financial transition of departure — from the practical notifications (P85, NRL1, NT coding) through to the longer-term planning of how to manage UK assets, pensions, and investments optimally from overseas. Contact our team to arrange a pre-departure planning consultation.
This article is for general information only and does not constitute financial, legal or tax advice. Rules, prices and regulations change; verify current requirements with a qualified adviser before acting.