Concept
Leaving the UK is not a US-style expatriation event. The UK has no citizenship exit tax equivalent to Form 8854. The legal issues are residence cessation, split-year treatment, temporary non-residence, UK-source income, UK property, trust and company consequences, and the inheritance tax tail.
This is general legal information, not individual tax advice. UK residence, treaty position, trust attribution, company residence and IHT exposure turn on facts and documents.
What leaving does and does not switch off
GOV.UK's guidance on tax when you leave the UK explains that a person leaving permanently, going to work abroad full-time for at least one full tax year, or leaving as a foreign national may need to tell HMRC, normally on form P85 or through Self Assessment. Non-residence usually removes foreign income and gains from UK income tax, but UK-source income and UK property can remain chargeable. P85 is a notification route, not the residence test: residence is decided by the SRT and the facts.
The departure tests
Residence and split year
The SRT decides whether the person is non-resident for the year. Split-year treatment is not whole-year non-residence — it applies only where a statutory case is met, so an investor leaving mid-year usually needs a split-year analysis rather than a simple non-resident conclusion.
Temporary non-residence
Where the person was UK resident in 4 of the 7 tax years before leaving and returns within five tax years, temporary non-residence rules tax certain income and gains arising during the absence in the year of return — a short trial year abroad rarely works.
UK property and IHT tail
UK land and property stay within UK CGT. A long-term resident — UK resident for 10 of the previous 20 tax years — keeps worldwide IHT exposure for a three-to-ten-year tail after leaving, scaling with how long they were resident.
UK property after departure
Disposals of UK residential property by a non-resident stay within UK CGT, and GOV.UK explains in its property gains guidance that the gain must usually be reported and any tax paid within 60 days. UK-situs assets remain within inheritance tax regardless of residence; long-term residence extends IHT to worldwide assets for the tail period.
Common mistakes
- Treating departure as effective from the flight date rather than the SRT and split-year cases.
- Continuing UK workdays or retaining a UK home and family tie after the supposed departure.
- Selling foreign assets during a short absence and being caught by temporary non-residence on return.
- Leaving UK company management facts unchanged so central management and control stays in the UK.
- Assuming inheritance tax exposure ends on the day of departure.
Evidence
Evidence includes the departure date, P85 or SA109 filings, employment relocation documents, overseas housing, UK home disposal or use, workday records, family movement, treaty residence evidence, certificates of residence, UK property records and the IHT residence year count.
Advisor trigger
A chartered tax adviser can handle a clean departure where the SRT and split-year position are clear. A UK tax solicitor should be involved where there is temporary non-residence exposure, a long-term-resident IHT tail, UK company management, trust benefits, a contested treaty position or a disposal timed around the departure year.
Q&A
Does the UK have a citizenship exit tax
No. The UK has no US-style citizenship exit tax and no Form 8854 equivalent. But temporary non-residence and the inheritance tax tail can be material after departure.
Is P85 enough to become non-resident
No. P85 is a notification route. Residence is determined by the Statutory Residence Test and the facts, including days, home, work and family ties.
Can UK tax continue after departure
Yes. UK-source income, UK property gains with 60-day reporting, temporary non-residence claw-back and the long-term-resident IHT tail can all remain relevant.
Is a trial year abroad worth attempting
Rarely. If you were UK resident in 4 of the 7 tax years before leaving, returning within five tax years triggers temporary non-residence and re-taxes gains and certain income arising during the absence. Plan for at least five full UK tax years out.
Related
Contact information
If you have questions or need a consultation, our experts will be glad to help.
Request a callback
Private.law Attorneys
This material is prepared for public review and may be freely shared.
We work on complex legal matters for demanding clients.
Our site