Below you will find the most popular questions asked by my clients about Leaving the UK. Simply click on the question which applies to you and you will be taken directly to the answer.
1. What tax forms do I need to complete when leaving the UK?
2. How do I keep my UK bank account when I move abroad?
3. How do I apply for a No Tax code for UK pension income?
4. How do I manage currency risk as an expat?
5. Is my UK life insurance still valid when living overseas?
6. What are the tax implications of renting out my UK property while living abroad?
7. Am I still eligible for the UK state pension if I move abroad?
8. How does moving abroad affect my credit score in the UK?
9. What are the best ways to transfer money internationally?
10. Can I continue to invest in ISAs if I live abroad?
11. What happens to my existing UK investments when I move overseas?
12. How do I manage my pensions from abroad?
13. What financial steps should I take before leaving the UK?
14. What are the implications of dual taxation, and how can I avoid being taxed twice?
1. What tax forms do I need to complete when leaving the UK?
British expatriates moving abroad may need to complete several forms related to taxes, depending on their circumstances.
Here are some key forms and considerations:
P85: This form should be completed by individuals who are leaving the UK to work abroad full-time for at least one full tax year.
The primary purpose of the P85 is to inform HM Revenue and Customs (HMRC) of your departure.
This can help in establishing your non-resident status for tax purposes and ensuring you’re taxed appropriately during the tax year of your departure.
It may even entitle you to a tax rebate 🙂
Self-Assessment Tax Return: If you are already within the self-assessment system in the UK (for example, if you are receiving income from property), you might need to continue completing a UK tax return.
Non-resident Landlord Scheme: If you own property in the UK and rent it out while living abroad, you’ll need to either use the Non-resident Landlord Scheme, which allows the rent to be paid without withholding UK tax or have the tax deducted by your letting agent or tenant.
Tax forms in your new country of residence: You will also need to consider the tax requirements in your new country of residence.
This might include filing tax returns there and complying with local tax laws.
Get in touch
If you are leaving the UK to live or work overseas, please get in touch for a free no-obligation 20-minute call.
During the call, you will get:
- Answers to your basic questions.
- Informal guidance on the options available to you.
- An overview of any services needed to get your expat financial affairs in order.
2. How do I keep my UK bank account when I move abroad?
Many British expatriates worry about maintaining an active UK bank account while living overseas.
There are various reasons for keeping a UK bank account, such as managing pension payments, covering expenses related to properties or financial obligations in the UK, or having convenient access to funds when visiting friends and family back home.
There are various steps to keeping your UK account open as an expat.
You can find them in this post.
Get in touch
If you are leaving the UK to live or work overseas, please get in touch for a free no-obligation 20-minute call.
During the call, you will get:
- Answers to your basic questions.
- Informal guidance on the options available to you.
- An overview of any services needed to get your expat financial affairs in order.
3. How do I apply for a No Tax code for UK pension income?
If you are a UK expat and need to apply for a No Tax (NT) code for your UK pension income, here’s how you can go about it:
Step 1 – Determine Your Residency Status.
First, you need to determine whether you are considered a UK resident or non-resident for tax purposes.
This affects your eligibility for a No Tax code.
Step 2 – use this link to download the relevant form from HMRC.
Step 3 – As well as completing the form, you will also need to make an appointment at your local tax office, who will provide confirmation of your tax residence.
Step 4 – Send the completed form to HMRC.
Step 5 – HMRC processes the application and sends the NT code to the pension scheme administrator.
Be aware that it could take HMRC more than 6 months to do this, so you should have sufficient funds available to tide you over in the interim.
Step 6 – The pension scheme applies the NT tax code to future income payments, with no tax deducted at source.
I strongly advise double-checking with HMRC directly before making a withdrawal if you wish to receive the income gross of UK income tax.
Get in touch
If you are retiring outside the UK, please get in touch for a free no-obligation 20-minute call.
During the call, you will get:
- Answers to your basic questions.
- Informal guidance on the options available to you.
- An overview of any services needed to get your expat financial affairs in order.
4. How do I manage currency risk as an expat?
- Figure out what currency you’ll need in the future for things like retirement, buying a house, or paying for education.
- Make sure the money you’re saving matches the currency you’ll need later.
For example, if you plan to retire in Europe, try to save money in euros.
- Understand how changes in currency values affect your savings.
Don’t just look at the currency listed on your investment statements or where the investment is from.
You might need to do some research to really understand this.
- If you’re investing in things like bonds or cash, it’s important to protect yourself against currency changes because they can really affect how much your investments are worth in the long run.
- If you’re investing in stocks, changes in currency values don’t matter as much in the long run.
But it’s still smart to spread your investments across different types of stocks and different parts of the world, maybe with a little extra focus on the currency you’ll need in the future.
- When you need to move money from one currency to another, try using online services like Wise or Revolut instead of your bank.
They usually give better exchange rates.
Get in touch
If you are leaving the UK to live or work overseas, please get in touch for a free no-obligation 20-minute call.
During the call, you will get:
- Answers to your basic questions.
- Informal guidance on the options available to you.
- An overview of any services needed to get your expat financial affairs in order.
5. Is my UK life insurance still valid when living overseas?
It depends on your insurer.
You should check with them that you are covered and, if you are, get confirmation in writing.
Find out more about your expat life insurance options in this post.
Get in touch
If you are leaving the UK to live or work overseas, please get in touch for a free no-obligation 20-minute call.
During the call, you will get:
- Answers to your basic questions.
- Informal guidance on the options available to you.
- An overview of any services needed to get your expat financial affairs in order.
6. What are the tax implications of renting out my UK property while living abroad?
Renting out your UK property while living abroad has several tax implications you need to consider. Here are the key points:
1. Income Tax on Rental Income:
- UK Income Tax: You will still be liable to pay UK income tax on the rental income generated from your UK property.
The income tax is calculated after deducting allowable expenses (such as property management fees, maintenance costs, mortgage interest, etc.).
- Non-Resident Landlord Scheme (NRLS): If you live abroad for more than six months, you are considered a non-resident landlord.
Under the NRLS, your letting agent or tenant must deduct basic rate tax (currently 20%) from the rent before it is paid to you, unless you have applied to HM Revenue and Customs (HMRC) for approval to receive the rental income gross (without deduction of tax).
2. Self-Assessment Tax Return:
- As a non-resident landlord, you are required to file a UK Self-Assessment tax return annually to declare your rental income and pay any additional tax due above the basic rate that has been deducted.
3. Double Taxation:
- If you are paying tax on your UK rental income in the country where you reside, you may be able to claim relief from double taxation under the Double Taxation Agreement (DTA) between the UK and your country of residence.
This generally involves claiming a credit for the tax paid in the UK against the tax payable in your resident country.
4. Capital Gains Tax (CGT):
- If you decide to sell your UK property while living abroad, you will be liable to pay UK Capital Gains Tax on any profit made from the sale.
Non-residents are required to report and pay CGT on disposals of UK residential property within 60 days of the sale completion.
5. Inheritance Tax:
- UK property remains subject to UK Inheritance Tax, even if you are non-resident.
6. Additional Considerations:
- Stamp Duty Land Tax (SDLT): If you purchase additional property in the UK while living abroad, you will be subject to the higher rates of SDLT, including the 3% surcharge on second homes.
- Foreign Exchange Rates: If you are receiving rental income in GBP but living in a country with a different currency, fluctuations in exchange rates could impact your income.
Steps to Take:
- Register with HMRC: Ensure you register with HMRC as a non-resident landlord.
- Apply for Gross Rent Scheme: Consider applying to HMRC for the gross rent scheme to receive rental income without tax deductions.
- Keep Accurate Records: Maintain detailed records of your rental income and expenses.
Get in touch
If you are leaving the UK to live or work overseas, please get in touch for a free no-obligation 20-minute call.
During the call, you will get:
- Answers to your basic questions.
- Informal guidance on the options available to you.
- An overview of any services needed to get your expat financial affairs in order.
7. Am I still eligible for the UK state pension if I move abroad?
Yes you are.
You can find out more about how you can claim, and increase your entitlement to, UK State Pension as an expat in this guide.
Get in touch
If you plan on retiring overseas, please get in touch for a free no-obligation 20-minute call.
During the call, you will get:
- Answers to your basic questions.
- Informal guidance on the options available to you.
- An overview of any services needed to get your expat financial affairs in order.
8. How does moving abroad affect my credit score in the UK?
Leaving the UK can affect your credit score in several ways.
Here are some key points to consider:
1. Maintaining Credit History
- Existing Accounts: If you maintain your UK credit accounts (such as credit cards, loans, or a mortgage), these will continue to impact your credit score.
- Credit Activity: A lack of ongoing credit activity in the UK can eventually make your credit history appear less current, which can impact your credit score negatively over time.
This is a particular issue for expats who return to the UK.
2. Address Update
- Electoral Roll: Being registered on the electoral roll at your UK address positively impacts your credit score.
- Credit Report Address: You will need to update your address with your creditors. However, having an overseas address might make it difficult for UK lenders to assess your creditworthiness.
3. Payment History
- Timely Payments: Continue making timely payments on any UK credit accounts.
Missed or late payments will negatively impact your credit score.
- Direct Debits: Set up direct debits to ensure payments are made on time, reducing the risk of missed payments.
4. Credit Utilisation
- Credit Limits: Keep your credit card balances low relative to your credit limits.
High credit utilisation can negatively impact your credit score.
- Credit Use: Regular use and timely repayment of your UK credit accounts can help maintain a positive credit score.
5. Access to Credit Reports
- Monitor Reports: Regularly monitor your UK credit reports for any discrepancies or fraudulent activity, even while abroad.
6. New Credit Applications
- Applications from Abroad: Applying for new credit from abroad will be challenging.
UK lenders are hesitant to extend credit if they cannot easily assess your current financial situation.
- Impact on Score: Multiple credit applications in a short period can negatively affect your credit score.
7. Returning to the UK
- Re-establishing Credit: If you return to the UK after a significant time abroad, you might need to re-establish your credit history.
Start with lower credit limits and gradually build up a positive credit history again.
8. International Credit Records
- Non-Transferability: Credit histories are not usually transferable between countries.
Your credit activities abroad will generally not be reflected in your UK credit report.
Steps to Take To Protect Your Credit Score When Moving Overseas
- Maintain UK Accounts: Keep at least one or two UK credit accounts active and in good standing.
- Regular Monitoring: Use services like Experian, Equifax, or TransUnion to monitor your UK credit report regularly.
- Update Information: Keep your UK creditors informed about your new address and contact details.
- Set Up Automatic Payments: To avoid missed payments, set up automatic payments for your UK credit accounts.
By being proactive and managing your UK credit accounts responsibly, you can mitigate the potential negative impacts on your UK credit score while living abroad.
Get in touch
If you are leaving the UK to live or work overseas, please get in touch for a free no-obligation 20-minute call.
During the call, you will get:
- Answers to your basic questions.
- Informal guidance on the options available to you.
- An overview of any services needed to get your expat financial affairs in order.
9. What are the best ways to transfer money internationally?
Transferring money internationally can be done through several methods, each with its own advantages and disadvantages.
Here are some of the ways you can transfer funds across borders:
1. Bank Transfers
- Pros: Reliable, secure, and widely available.
- Cons: Can be expensive due to high fees and unfavourable exchange rates; might take several days for the transfer to complete.
- Best for: Large amounts of money, where security is a priority.
2. Online Money Transfer Services
- Examples: Wise (formerly TransferWise), Revolut.
- Pros: Often lower fees and better exchange rates than banks; fast transfers; user-friendly interfaces.
- Cons: Requires reliable internet access; some services may not cover all countries.
- Best for: Frequent and smaller transfers; when cost efficiency is important.
3. Peer-to-Peer Transfer Services
- Examples: PayPal, Venmo.
- Pros: Convenient and easy to use; integrated with many e-commerce platforms.
- Cons: Higher fees and poorer exchange rates compared to dedicated transfer services; not available in all countries.
- Best for: Smaller, personal transactions.
4. Western Union and MoneyGram
- Pros: Extensive global network; can send cash for pickup.
- Cons: Higher fees and less favourable exchange rates; not ideal for large sums.
- Best for: Sending cash to remote locations where banking infrastructure is limited.
5. Foreign Exchange Brokers
- Examples: TorFX, XE, Currencies Direct.
- Pros: Competitive exchange rates and lower fees for large amounts; personalised service.
- Cons: Requires setting up an account; might not be suitable for small transfers.
- Best for: Large transactions; when getting the best exchange rate is crucial.
7. International Money Orders
- Pros: Secure and widely accepted.
- Cons: Slow and often involves significant fees; less convenient.
- Best for: Sending money to recipients without bank accounts.
Factors to Consider:
✔️Fees: Compare the transfer fees, which can vary based on the service, transfer amount, and destination.
✔️Exchange Rates: Look for services that offer mid-market rates or lower margins on exchange rates.
✔️Transfer Speed: Determine how quickly you need the funds to arrive. Some services offer instant transfers, while others may take several days.
✔️Security: Ensure the service is reputable and uses encryption and other security measures to protect your transaction.
✔️Convenience: Consider how easy it is to use the service, including the registration process and the methods available for sending and receiving funds.
✔️Amount Limits: Check if there are any limits on the amount you can send or receive.
Get in touch
If you are leaving the UK to live or work overseas, please get in touch for a free no-obligation 20-minute call.
During the call, you will get:
- Answers to your basic questions.
- Informal guidance on the options available to you.
- An overview of any services needed to get your expat financial affairs in order.
10. Can I continue to invest in ISAs if I live abroad?
No.
Find out more about expat ISA rules here.
Get in touch
If you are leaving the UK to live or work overseas, please get in touch for a free no-obligation 20-minute call.
During the call, you will get:
- Answers to your basic questions.
- Informal guidance on the options available to you.
- An overview of any services needed to get your expat financial affairs in order.
11. What happens to my existing UK investments when I move overseas?
When you move overseas, your existing UK investments can be affected in several ways.
It is important to understand the potential implications for your investments, taxes, and regulatory requirements.
Here’s an overview:
1. Tax Implications
- Income Tax: You may still be liable for UK tax on income generated from UK investments, such as dividends from shares, interest from savings accounts, and rental income from property.
- Capital Gains Tax (CGT): If you sell any UK investments while abroad, you may be liable for UK CGT on the gains, though there are exceptions and reliefs available under certain conditions.
- Double Taxation Treaties: The UK has double taxation treaties with many countries to prevent you from being taxed twice on the same income.
You can often claim relief in the country you are residing in for taxes paid in the UK.
2. Reporting Requirements
- Self-Assessment: If you are a UK taxpayer, you will need to file a Self-Assessment tax return annually to declare income and capital gains from UK investments.
- Foreign Account Tax Compliance Act (FATCA): If you are moving to the US, you will need to comply with FATCA regulations, which require reporting of foreign financial accounts and assets.
3. Investment Management
- Brokerage Accounts: Check with your broker if they will allow you to maintain your UK account while residing abroad.
Some brokers may restrict services or close accounts if you move to certain jurisdictions.
- Professional Advice: Consider consulting with a financial adviser who specialises in expatriate finances to help manage your investments and tax liabilities.
4. ISAs (Individual Savings Accounts)
- Existing ISAs: You can keep your existing ISAs and they will continue to grow tax-free in the UK. However, you cannot contribute to ISAs while you are non-resident.
5. Property Investments
- Rental Income: Rental income from UK property will be subject to UK income tax, and you may need to register with the Non-Resident Landlord Scheme.
- Selling Property: Selling UK property will likely incur CGT.
The reporting and payment of CGT must be done within 60 days of the sale completion.
6. Currency Considerations
- Exchange Rates: Your investment returns can be affected by exchange rate fluctuations if you need to convert your investment income to the local currency of your new country of residence.
- Foreign Exchange Services: Use reputable foreign exchange services to manage currency conversions efficiently.
8. Regulatory Compliance
- Host Country Regulations: Be aware of the investment and tax regulations in your new country of residence.
Steps to Take
✔️Inform Financial Institutions: Notify your banks, brokers, and investment managers of your move to ensure compliance with their policies and regulatory requirements.
✔️Seek Professional Advice: Consult with a financial adviser who specialises in expatriate finances to optimise your investment strategy and tax efficiency.
✔️Review and Adjust Portfolio: Assess your investment portfolio to ensure it aligns with your new financial situation and goals.
✔️Stay Informed: Keep up-to-date with tax laws and regulations in both the UK and your new country of residence.
Get in touch
If you are leaving the UK to live or work overseas, please get in touch for a free no-obligation 20-minute call.
During the call, you will get:
- Answers to your basic questions.
- Informal guidance on the options available to you.
- An overview of any services needed to get your expat financial affairs in order.
12. How do I manage my pensions from abroad?
Managing your pensions from abroad involves understanding the specific rules and regulations for expats, as well as considering tax implications, withdrawal options, and potential transfers.
Here’s a guide to managing your private and workplace pensions while living abroad:
Understand the Types of Pensions
- State Pension: The UK State Pension is based on your National Insurance contributions.
You can still claim it if you live abroad.
You can also continue to make voluntary contributions to increase your entitlement to UK State Pension while you are living overseas.
Private Pensions: These include personal pension plans and Self-Invested Personal Pensions (SIPPs) that you have set up independently.
- Workplace Pensions: These are pensions provided by your employer, including defined contribution and defined benefit schemes.
State Pension
- Eligibility: Ensure you have made enough National Insurance contributions to qualify for the UK State Pension.
You can check your State Pension forecast here.
- Claiming: You can claim your State Pension from abroad. It will be paid into your bank account every four weeks.
- Freezing: If you live in a country that has a social security agreement with the UK, your State Pension will increase with inflation.
If not, your State Pension may be frozen at the rate when you first claim it abroad.
You can find a list of countries where the UK State Pension is frozen here.
Private and Workplace Pensions
- Maintaining Contributions: You can continue to contribute to your private pensions if you have UK earnings.
You can also contribute up to £3,600 pa and get full tax relief for the first 5 years that you live overseas. You can find out more about this here.
- Accessing Pension Funds: The age at which you can access your pension funds remains the same.
Generally, you can start withdrawing from your private pensions from the age of 55 (rising to 57 in 2028).
Tax Implications
- Income Tax: Pension withdrawals often have UK income tax deducted at source.
You may also be taxed in your country of residence.
However, double taxation agreements can sometimes mitigate this.
You can avoid having UK income tax deducted at source by applying for a NT (No Tax) code.
- Lump Sum: The 25% pension commencement lump sum (PCLS) is available when you start withdrawing your private pension.
This is tax free in the UK.
However, it may be taxable in your country of residence.
Always take professional advice when taking the PCLS from your pension when living overseas.
Qualifying Recognised Overseas Pension Scheme (QROPS):
- Transfer to QROPS: You may transfer your UK pensions to a QROPS, which can offer tax benefits and flexibility with currency.
However, there can be high fees and potential unforeseen tax charges, so seek professional advice.
Currency Considerations:
- Exchange Rates: Your pension income may be affected by currency fluctuations.
Consider using foreign exchange services to manage currency risk.
- Payment Options: Some pension providers can pay pensions into overseas bank accounts, but check if there are any fees or exchange rate issues.
Administrative Steps
💼Notify Providers: Inform your pension providers of your new address and ensure they have your contact details updated.
💼Tax Residency: Inform HMRC of your change in residency status to ensure your tax is calculated correctly.
💼Bank Account: Set up an international or local bank account to receive your pension payments.
Professional Advice
- Financial Adviser: Consult with a financial adviser specialising in expatriate finances to ensure your pension strategy aligns with your retirement goals.
- Tax Adviser: A tax adviser can help you understand the tax implications in both the UK and your new country of residence and ensure compliance with local tax laws.
Steps to Take
✔️Review Pension Schemes: Evaluate your current private and workplace pension schemes and understand the rules for expatriates.
✔️Plan Withdrawals: Strategize how and when to start withdrawing your pension funds, considering tax implications and your financial needs.
✔️Stay Informed: Keep up-to-date with changes in pension regulations both in the UK and your country of residence.
✔️Monitor Investments: Regularly review your pension investments to ensure they align with your risk tolerance and retirement goals.
Get in touch
If you are leaving the UK to live or work overseas, please get in touch for a free no-obligation 20-minute call.
During the call, you will get:
- Answers to your basic questions.
- Informal guidance on the options available to you.
- An overview of any services needed to get your expat financial affairs in order.
13. What financial steps should I take before leaving the UK?
Before leaving the UK to work or retire overseas, it’s important to take several financial steps to ensure a smooth transition.
Here are the key steps you should consider:
- Update Your Address
Notify banks, credit card companies, insurance providers, HMRC, and other financial institutions of your new address.
- Review and Close Accounts
Assess your UK bank accounts, savings accounts, and credit cards.
Close any accounts you won’t need or transfer funds to an account you can access internationally.
- Manage Debts and Loans
Settle or make arrangements to manage any outstanding debts, loans, or mortgages.
Ensure you have a plan in place for repayments while you’re abroad.
- Tax Considerations
Inform HMRC of your move to avoid any future tax issues.
Fill out the P85 form to declare that you’re leaving the UK.
Consider any tax implications in both the UK and your destination country.
- Pensions and Investments
Review your pension plans. Remember that you can continue to save into a UK pension for the first 5 years of living overseas (most expats miss this).
Check the status of any investments and decide on the best course of action.
Stop any automated ISA contributions. You cannot pay into an ISA while living overseas.
- Cancel or Transfer Subscriptions and Services
Cancel or transfer any UK-based subscriptions, memberships, and services that you won’t be using abroad.
- Update Insurance Policies
Check your insurance policies (health, car, home, travel) and update or cancel them as necessary.
Get the providers to confirm IN WRITING that you will still be covered while living overseas.
Consider taking out new insurance policies for your destination country.
- Get Copies of Financial Records
Obtain copies of important financial documents, such as bank statements, tax records, and proof of identity, in case they are needed abroad.
- Transfer Money
Transfer money to an overseas bank account if needed.
Research the best ways to transfer money internationally to avoid high fees and unfavourable exchange rates.
Expat Financial Advice: How do I manage currency risk?
- Budget for Moving Costs
Plan and budget for moving expenses, including shipping, temporary accommodation, and any initial costs in your new country.
- Set Up a New Bank Account Abroad:
Research and open a bank account in your new country before leaving the UK, if possible.
- Consider Financial Advice
Seek professional financial advice to help manage the transition and optimise your financial situation.
Get in touch
If you are leaving the UK to live or work overseas, please get in touch for a free no-obligation 20-minute call.
During the call, you will get:
- Answers to your basic questions.
- Informal guidance on the options available to you.
- An overview of any services needed to get your expat financial affairs in order.
14. What are the implications of dual taxation, and how can I avoid being taxed twice?
Dual taxation, also known as double taxation, occurs when the same income or financial transaction is taxed by two different jurisdictions or authorities.
This situation commonly arises in the context of international taxation, where individuals may be subject to tax in both their home country and the country where the income is earned.
Practical Steps to Avoid Dual Taxation
- Review Tax Treaties: Check if the UK has a tax treaty with the country that you are moving to.
These treaties often have provisions that can help you avoid double taxation.
- Maintain Proper Documentation: Keep detailed records of all income earned and taxes paid in foreign jurisdictions to support claims for credits or exemptions.
- Understand Local Laws: Be aware of the tax laws in the country that you are moving to in order to ensure compliance and take advantage of any available relief provisions.
- File Necessary Forms: Ensure that you file the necessary forms with both your home country’s tax authority and the foreign tax authority to claim any applicable credits or exemptions.
How do I apply for an NT Code for pension income?
By understanding the implications of dual taxation and utilising these strategies, you can effectively manage and potentially reduce your overall tax liability.
Get in touch
If you are leaving the UK to live or work overseas, please get in touch for a free no-obligation 20-minute call.
During the call, you will get:
- Answers to your basic questions.
- Informal guidance on the options available to you.
- An overview of any services needed to get your expat financial affairs in order.
