If you are going to work abroad temporarily you should ask your tax office for a form P85 or you can download one from the HMRC website. Student loan borrowers should also read our Going Abroad guidance.
By completing it and sending it to your current tax office it starts the process of taking you out of the UK tax system and applies for a tax repayment if you may have one due.
Form P85 asks for details about:
- your reasons for leaving the UK
- what you will be doing while you are abroad
- any assets or income you will leave in the UK
If you leave the UK and become not resident you will pay UK tax only on your income arising in the UK (subject to the provisions of any relevant double tax agreement between the UK and the country you are now working and living in). You may be exempt from UK capital gains tax on gains arising in the UK (but you will need to consider whether there are tax issues arising in the country in which you are working).
But just because you leave the UK, it does not mean that you are automatically not resident. Your residence status will depend on:
- the purpose of your time abroad
- how often you visit the UK after you have left
- the purpose of your visits to the UK
- what connections you keep in the UK, such as family, property, business and social connections
If you leave the UK to work full time abroad it is worth trying to understand the HMRC advice contained in their leaflet HMRC6, in particular at paragraphs 8.5 to 8.9. HMRC have also released further guidance on the definition of full time work abroad for residence purposes.
Special provisions apply to people who are UK government employees working abroad or those who go to work for EU government institutions. Similarly if you work on a ship, gas or oil rig or are a volunteer development worker you should seek advice from HMRC.
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