There’s so much to think about when you move abroad. From making last minute arrangements, to packing up and waving goodbye to friends, it can be as stressful as it is exciting.

The last thing you’re likely to think about when making your big move is your tax situation in the UK, but you need to let HMRC know you’re leaving, not least so you can claim a rebate on any tax that has been overpaid.

This depends on how long you’ll be away. You don’t have to do anything if you’re only popping on holiday for two weeks, but you’ll need to tell HMRC if you’re:

• Leaving the UK to live abroad permanently
• Planning to work overseas for at least a full year

Why do I need to tell HMRC that I’m leaving the UK?

Leaving the UK for a tax year or longer can affect how you pay tax on your earnings. Keeping HMRC in the loop enables them to work out if you’re still classed as resident for tax, as well as calculating whether you still owe tax, or are owed a refund.

Even if you leave the UK, you may still be classed as a tax resident. There are several factors which determine residency status, including:

• How many days you spent in the UK if you return after leaving
• The reason for any visits to the UK
• Why you’re going abroad
• Whether you have any family or other connections to the UK

Tax residency is important because it determines where and how you pay tax, and can help avoid paying tax twice on the same income. If you’re relocating to live overseas but still earn income from the UK, notifying HMRC that you are leaving helps ensure that you pay the correct amount of tax, and to the right tax authority.

The process for this depends on whether you normally send a Self Assessment tax return to HMRC or not.

• If you usually submit a tax return: Complete your Self Assessment tax return as normal, and include the supplementary section SA109 to update your residence and domicile status.
• If you don’t normally submit tax returns: Fill in and submit a P85 form

 
This helps HMRC calculate how much tax you should pay, and in which country you need to pay it. If you haven’t lived in the UK for 3 years or more, you will generally be considered as ‘not resident and not ordinarily resident’.

It’s a very good idea to check if there’s a double taxation agreement in place between the two countries if you will be a tax resident in both. You’ll only need to pay tax in one country rather than both if there is one in place – another reason why it’s so crucial to notify HMRC!

You’ll normally only need to pay tax on the income you received during the time you were in the UK. HMRC will use your completed P85 Form or tax return to work out whether or not you’re owed a refund, or if you need to pay more.

I’m due a tax rebate from HMRC. When can I claim it back?

You can apply for a tax refund as soon as you stop working in the UK, although it might complicate things if you need to return for work before the start of a new tax year.

If you are planning to claim a tax rebate while you’re on an extended holiday or taking a gap year, make sure you stay in your new country for at least one full tax year. You won’t be eligible to claim your UK tax back otherwise.
 

You can return to the UK for visits, although your tax residence status depends on why you visit and how long you’re in the country.

 
If you decide to come back to the UK permanently, you’ll need to tell the other country’s tax authority to make sure you’ve paid enough tax there. The last thing you want is to end up in any tax-related hot water in either country.

There are actually quite a few things you can claim tax relief for. This is why it’s well worth getting everything right, so you don’t end up paying more tax than you need to. You can commonly claim tax relief for:

• Residency status: ‘If you are non-resident for tax purposes’
• Paying tax in the UK tax whilst being employed in a different country
• Work expenses: There are all sorts of work expenses you can claim for, but as a general guide they include uniform costs, buying equipment and tools, or paying for memberships to professional bodies and unions
• Letting out your property in the UK: Where this is the case, you can be considered a non-resident landlord
• Income from a UK pension where you’ve paid tax on this income
• Personal Allowance: If you left the UK part way through a tax year and haven’t used all of your Personal Allowance

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