Shattering the tax myths – I don’t pay tax in the year I move abroad

Tax myths are creating problems in an already confusing tax system. One such myth covers moving abroad. This is a complete minefield unless adequate preparation is made. In this article we’ll concentrate on the myth “I don’t pay tax in the year I move abroad”.Unfortunately it is not that simple, if only it were.

First of all we need to look at whether you are UK domiciled, why you are leaving, how long you intend to be away, when you are leaving, the sources of your income and then consider the types of tax that we are concerned about. For example if we assume you are UK domiciled, leaving the UK permanently, and you’ve done everything to establish yourself as non resident, including notifying HM Revenue & Customs.

If you leave part way through a tax year, by concession you may not pay UK tax on some income, such as earnings from employment carried on wholly abroad for the part of the tax year after you leave the UK. This may not be so for other income. Capital gains realised in the tax year that you leave will still be liable to UK taxes, irrespective that they may occur after you leave. The simple answer to emigration is take advice early and plan carefully to maximise your tax savings.