Will I get a tax refund on leaving the UK?

If you have been an employee in the UK, the taxation of your income was dealt with by your employer under the PAYE scheme. This scheme assumes that your allowances and entitlement to the basic rate of tax are spread evenly over the year. This means that if you leave half way through the year, you have only had half your tax free allowance (Personal Allowance) and only half the amount at the basic rate to which you are entitled. The result is that for the tax year, if you have no other income arising in the UK once you have emigrated, you will have paid too much tax. If you have other income, such as property income or deposit interest, you may still have paid too much tax.

You may claim a refund on leaving the UK on form P85 (use form P85S if you are a foreign national and were in the UK for employment only), or you may claim your refund when we prepare your Tax Return after the end of the tax year. The form will ask you about the income you expect to have arising in the UK after you have left (including property income) and this will be taken into account in calculating your refund. As with any calculation made before the end of the tax year, this will only be an approximate calculation, so do remember to submit your Tax Return following the end of the year in which you emigrated if you want a precise calculation.

Get in touch to find out how we can help you with your Tax Return both before and after you leave the UK

‍What if I have other income in the UK?

Other income arising in the UK is still taxable even though you may be non-resident. See our Guide for non-resident landlords.

‍Do I still have to pay Capital Gains Tax if I have left the UK?

Non-residents are subject to Capital Gains Tax on the gains in excess of the Annual Exempt Amount made on the disposal of UK land and buildings. See Capital Gains Tax or contact us. Non-residents are subject to CGT on gains accruing after 5th April 2015 (residential property) and 5th April 2019 (non-residential property).

With effect from 27th October 2021, all disposals must be reported to HMRC within 60 days (previously 30 days) of transfer and any Capital Gains Tax due must be paid within the same 60 days.‍

What happens in the year that I leave the UK?

The “split year” treatment is a means of treating people as being non-resident for tax purposes from the time they leave the UK to the time they return to become resident –rather than using 6th April after the date of departure to 5th April before the date of return. If split year concession does NOT apply to you, and you dispose of an asset between the date of emigration and the following 5th April, then the whole of the gain made on that disposal remains liable to UK Capital Gains Tax subject to the normal reliefs and allowances. If you dispose of an asset after 5th April following emigration (and before 5th April 2015), and you remain non-resident for five full tax years (or more) then the gain accruing before 5th April 2015 and made on the disposal is outside the scope of UK taxation. The reverse applies on your return to the UK: if you sell an asset after the 5th April preceding your return to the UK (and becoming resident once more), then the gain on the disposal is subject to Capital Gains Tax subject to the normal reliefs and allowances.

You may be treated as being UK tax resident for the whole of the tax year in which you leave the UK and for the whole of the tax year when you come to the UK. This means that income and gains arising after you have emigrated but before the following 5th April may be subject to UK tax. Similarly, income and gains arising after 5th April in the year when you return to the UK (but both before and after you arrive) can also be subject to UK tax. To avoid this position, most emigrants and immigrants may take advantage of the “split year treatment”. This treatment allows you to be treated as non-resident from the day you leave the UK until the day you return.

If you use the split year treatment, only income arising in the UK will be subject to UK tax while you are non-resident, and you will be subject to the non-resident rules for Capital Gains Tax (CGT) – (on the disposal of residential property only the gain arising after 5th April 2015 is subject to CGT and on the disposal of non-residential property only the gain arising after 5th April 2019 is subject to CGT. In both cases if the normal rules for Capital Gains Tax for UK residents are more beneficial you may use those).

If split year concession does NOT apply to you, and you dispose of an asset between the date of emigration and the following 5th April, then the whole of the gain made on that disposal remains liable to UK Capital Gains Tax subject to the normal reliefs and allowances. If you dispose of an asset after 5th April following emigration (and before 5th April 2015), and you remain non-resident for five full tax years (or more) then the gain accruing before 5th April 2015 and made on the disposal is outside the scope of UK taxation. The reverse applies on your return to the UK: if you sell an asset after the 5th April preceding your return to the UK (and becoming resident once more) then the gain on the disposal is subject to Capital Gains Tax subject to the normal reliefs and allowances.

Get in touch today find out how we can help you with your Capital Gains Tax calculation

Do I have to pay Inheritance Tax if I have left the UK?

If you are UK domiciled as well as a non-resident at the time of death, Inheritance Tax will be payable on your worldwide assets if the total value is in excess of the Inheritance Tax threshold. If you are non-resident and non-domiciled, Inheritance Tax will apply to your UK assets. If you hold your UK property through a UK or non-resident company, Inheritance Tax will also apply.

The taxation of the estate of a deceased person differs from country to country. In some countries there are rules as to who inherits what. In November 2015, the EU passed legislation granting more flexibility as to who can inherit what. If you die abroad, you may be subject to the Inheritance Tax (or its equivalent) in several different countries. It is vital that you take professional advice not only in the UK but also in the country in which you intend to become resident before going there. You will probably be advised to make a will in each jurisdiction.

Contact us to find out how we can help you with your Inheritance Tax calculation

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