Understanding your UK tax residence when leaving the UK could be the difference between remaining taxable on your worldwide income and gains and being taxable on your UK sourced income only. This is particularly relevant when leaving the UK for a low tax jurisdiction since double taxation relief will be minimal if you remain UK taxable.
UK tax residents are taxable on their worldwide income and gains whereas non-residents are only taxable on their UK sourced income and certain property gains. It is therefore often optimal to break UK tax residence when leaving the UK and exit the UK tax system.
Your UK tax residence when leaving the UK is determined by the Statutory Residence Test which relies on factors such as your time spent in the UK, the location of your homes, and the residence status of your family. Time already spent in the UK in the tax year is also relevant and we therefore recommend you obtain advice prior to leaving to ensure you do not inadvertently remain UK tax resident.
Our Statutory Residence Test guide explains the SRT in detail and this article focuses on the common scenarios and pitfalls faced to determine UK tax residence when leaving the UK.
Important: Simply leaving the UK does not automatically make you non-resident for tax purposes. Your residence status depends on the Statutory Residence Test, and many people remain UK tax resident after emigrating.
If you want to discuss your UK tax residence when leaving the UK and find out how to optimise your personal tax position, please contact us at Expat Tax Solutions.
Why Is My UK Tax Residence When Leaving The UK Important?
UK tax non-residents are taxable in the UK on their UK sourced income and UK property gains.
UK sourced income includes:
- Employment/self-employment income relating to duties performed in the UK
- Dividends from UK companies
- UK bank interest
- UK pension income
- Rental income from UK properties
Since the primary source of income for most individuals is their employment/self-employment income, a significant tax saving can be achieved since this income will not be taxable in the UK in the hands of a non-resident if the duties are performed outside of the UK. This is irrespective of where your employer or clients are located, and the key factor is where you are physically located when you perform the duties.
For individuals moving to lower tax jurisdictions (which is commonly the case due to the UK’s relatively high tax rates), it can be extremely valuable to exempt your employment/self-employment income from UK tax.
Further exemptions may also be available to non-residents in respect of UK dividend and UK bank interest under the Disregarded Income rules, and UK pension income can also commonly be exempted under a Double Taxation Agreement.
This guide focuses on the steps required to break UK tax residence when leaving the UK and we recommend obtaining bespoke advice tailored to your specific circumstances as soon as possible before leaving the UK.
How Do I Become UK Non-Resident?
Anyone can become UK tax non-resident, but the amount of time you can subsequently spend back in the UK without regaining residence varies depending on your circumstances. One of the key factors impacting how much time you can spend in the UK is when in the tax year you leave the UK which is explained below.
UK Tax Residence When Leaving The UK At The Start of The Tax Year
Individuals who leave the UK at the start of the tax year (6 April) or shortly afterwards will often find it easier to become non-resident. This is because each tax year is assessed in isolation and they do not have prior time in the UK in the current tax year which needs to be considered. These individuals can therefore be full year non-resident if they meet any of the following tests:
The 1st Automatic Non-Resident Test
This is met if you were UK tax non-resident in all of the previous three tax years and spend fewer than 16 days in the UK during the current tax year.
The 2nd Automatic Non-Resident Test
This is met if you were UK tax resident in at least one of the previous three tax years and spend fewer than 46 days in the UK during the current tax year.
The 3rd Automatic Non-Resident Test (Full Time Work Abroad)
This is met if you are deemed to be in full time work abroad for the entire tax year by meeting the following criteria:
- You have fewer than 91 days of UK presence during the tax year; and
- You exercise fewer than 31 UK workdays during the year; and
- You work ‘sufficient hours’ overseas during the tax year; and
- You do not have a ‘significant break’ from overseas work during the tax year.
You work ‘sufficient hours’ overseas during the tax year if you average at least 35 hours of overseas work per week during the year. Days spent working in the UK or on annual leave, sick leave etc are excluded. HMRC’s calculation for determining the average number of hours worked overseas can be found here.
You will have a ‘significant break’ from overseas work if there is a 31 day consecutive period during the tax year during which you do not perform an overseas workday. Days spent on annual leave, sick leave and parental leave are not counted provided that you would’ve otherwise worked overseas on these days had you been working. A significant break therefore typically only applies if you have a 31 day consecutive period of work in the UK or a 31 day period of unemployment.
Conclusion
On the assumption that individuals leaving the UK will have been UK tax resident previously, they will therefore need to spend fewer than 16 days in the UK or meet the conditions of Full Time Work Abroad (FTWA).
Self-employed individuals and freelancers may find it challenging to meet the sufficient hours aspect of FTWA and therefore may not qualify to be non-resident under these tests. If none of the above tests are met, we move onto the second section of the SRT explained below.
UK Tax Residence When Leaving The UK Partway Through The Tax Year
For individuals leaving the UK partway through the year, the above non-residence tests are commonly not met due to the amount of time already spent in the UK during the tax year. We must therefore consider the following automatic residence tests:
The 1st Automatic Residence Test
This is met if you spend 183 days or more in the UK during the tax year.
The 2nd Automatic Residence Test (Home test)
This is met if there is a 91 day consecutive period, only 30 days of which need to fall in the tax year, during which you have a UK home in which you spend more than 30 days during the tax year and you either have no overseas homes or, if you do have an overseas home, you spend fewer than 30 days in it during the tax year.
The 3rd Automatic Residence Test (Full Time Work in the UK)
This is met if there is a 365 day period, only 1 day of which needs to fall in the tax year, during which you exercise at least 75% of your working time in the UK and you do not have a significant break from UK work.
Conclusion
In practice, the second or third automatic UK residence tests are usually met for individuals who leave the UK partway through the year since their only home was in the UK or they were working full time in the UK prior to their departure. This is sufficient for the individual to be considered as UK tax resident however it may still be possible to split the tax year into a period of residence and non-residence.
Individuals who are already somewhat nomadic and do not meet the above tests will have their residence status determined by the Sufficient Ties Test which is discussed in more detail here.
Split Year Treatment
Should you be UK tax resident, you may be eligible to split the tax year and become non-resident from the date that any of the three following cases apply:
- Case 1: Starting Full Time Work Abroad
- Case 2: The Partner of Someone Starting Full Time Work Abroad
- Case 3: Ceasing To Have A Home In The UK
These cases are applied in numeric order and therefore case 1 is the most common.
Case 1: Starting Full Time Work Abroad
To be eligible to split the year under Case 1, you must:
- Be UK tax resident in the current tax year; and
- Have been UK tax resident in the previous year; and
- Meet the conditions of Full Time Work Abroad (the 3rd automatic overseas test above) for the entire following tax year; and
- Meet a pro-rated version of the Full Time Work Abroad test for the remainder of the current tax year.
The pro-rated version of the FTWA test depends on which month you start working abroad. From the date of your first overseas workday through to the end of the tax year you must work sufficient hours overseas and not have a significant break from overseas work however the 31 UK workday and 91 UK days of presence thresholds are pro-rated based on the month in which you started work overseas per the table below:
| Date of first overseas workday | Permitted number of UK workdays | Permitted number of UK days |
|---|---|---|
| 6 – 30 Apr | 30 | 90 |
| 1 – 31 May | 27 | 82 |
| 1 – 30 Jun | 25 | 75 |
| 1 – 31 Jul | 22 | 67 |
| 1 – 31 Aug | 20 | 60 |
| 1 – 30 Sep | 17 | 52 |
| 1 – 31 Oct | 15 | 45 |
| 1 – 30 Nov | 12 | 37 |
| 1 – 31 Dec | 10 | 30 |
| 1 – 31 Jan | 7 | 22 |
| 1 – 29 Feb | 5 | 15 |
| 1 – 31 Mar | 2 | 7 |
| 1 – 5 Apr | 0 | 0 |
All of the split year cases require you to be non-resident in the following tax year and you will therefore likely need to remain outside of the UK until the following April. I.e. if you leave the UK during 2026/27 (6 April 2026 – 5 April 2027), you will likely need to remain outside of the UK until April 2028.
If you are eligible to split the tax year then you will be UK tax non-resident from the earliest date that the conditions are met.
Common Pitfalls of UK Tax Residence When Leaving The UK
There are several common reasons which may prevent you from breaking residence which are listed below. Knowing these in advance is key to ensure you can break UK tax residence when leaving the UK.
Not Working Sufficient Hours
Many digital nomads may not meet the sufficient hours criteria of full time work abroad. This commonly impacts the split year cases since starting full time work abroad is the primary way to split the tax year. It is still possible to be UK tax non-resident in full years outside of the UK (usually under the sufficient ties test) however individuals in this position can expect to remain UK tax resident until the end of the tax year of their departure (5 April).
Returning To The UK Too Frequently
The amount of time you spend in the UK is the primary factor determining your UK tax residence. Each day you are present in the UK at midnight is counted as a day of presence and therefore trips to the UK after your departure may delay or prevent you from breaking UK tax residence.
Understanding your UK day-count thresholds will help you manage the amount of time you spend in the UK after your departure while remaining non-resident.
Returning To The UK Too Soon
As all split year cases require the individual to be UK tax non-resident in the following year, returning to the UK and resuming residence prior to the end of the following year will invalidate all split year claims.
You may therefore be required to be outside of the UK for as long as 22 months to break UK residence if you leave quite early in a tax year.
Considerations When Returning To The UK
Although non-residents are taxable in the UK on their UK sourced income and UK property gains only, anti-avoidance provisions called the temporary non-residence rules may apply if you are non-resident for fewer than 5 years.
These rules apply where:
- The individual is ‘solely’ UK resident for a complete tax year (or the UK part of a split tax year); and
- Following that period, one or more tax years (or parts of a split tax year) occur for which he does not have sole UK residence; and
- The temporary period of non-residence is five years or less; and
- At least four out of the seven tax years immediately preceding the tax year in which he ceased to be solely UK resident were tax years for which he had sole UK residence (or a split year for part of which he had sole UK residence).
If applicable, relevant income and gains will become UK taxable in the year you resume residence. It is therefore important to consider the types of income and gains you make while non-resident to determine whether they will ultimately become taxable.
Key Obligations
Individuals are not usually required to notify HMRC that they have become non-resident when they leave the UK however the following obligations are typical when leaving the UK.
UK Self-Assessment Tax Return
You may be required to file a self-assessment tax return as a non-resident or split year resident to declare and pay tax on your UK taxable income after your departure. UK tax returns are due for submission by 31 January following the end of the tax year and a full list of filing criteria can be found here.
Form P85
Form P85 is required if you wish to claim an in-year tax refund as a result of leaving the UK or if you want to obtain an NT (no tax) code to prevent UK PAYE withholding on UK employment income while outside the UK.
If you are filing a self-assessment tax return, we do not typically recommend that Form P85 is filed to obtain a refund as your position is instead reconciled on your tax return.
Non-Resident Capital Gains Tax Return
If you sell a UK property while non-resident, the portion of the gain relating to the period after 6 April 2015 is taxable as this is when the non-resident capital gains tax regime was implemented. You are also required to file a non-resident capital gains tax return within 60 days of sale in all cases even if no tax is payable.
Record Keeping
UK tax residence when leaving the UK is one of the most common topics that HMRC enquire into following submission of UK tax returns. As the SRT relies heavily on where you spend your time, it is essential to retain evidence of your whereabouts and working pattern. This can include flight bookings and immigration records, meeting records and office attendance data.
You are required to keep records for five years from 31 January following the end of the tax year. I.e. records for the 2026/27 UK tax year must be kept until 31 January 2033.
UK Tax Residence When Leaving The UK FAQs
Can I break UK tax residence when leaving the UK?
Yes, all individuals can break UK tax residence when leaving the UK and the limitations on how much time they can spend in the UK will be specific to their circumstances.
How long do I have to leave the UK for to break UK tax residence?
The exact amount of time you need to spend outside of the UK will depend on your specific case however we typically expect individuals to have to remain outside of the UK until the April following the tax year in which they left the UK to break UK tax residence when leaving the UK.
How much time can I spend in the UK to be non-resident?
It will depend on your specific circumstances however many individuals will need to spend fewer than 90 days in the UK each tax year to remain non-resident, although the exact limit depends on their individual circumstances.
Am I non-resident if I spend fewer than 183 days in the UK?
It is a common misconception that individuals are only UK tax resident if they spend more than 183 days in the UK. While it is true that you will be UK tax resident if you spend more than 183 days in the UK, it is not true that spending fewer than 183 days in the UK will result in non-residence as several other factors will apply.