Living abroad, with money and plans still tied to the UK

What changes when you leave

Leaving the UK does not cut your financial ties to it. Your UK pensions stay where they are and remain subject to UK rules. Rental income from a UK property is still taxed here. And whether you are treated as UK resident in any tax year is decided by the Statutory Residence Test, which counts days and ties to the UK in ways that catch people out, particularly in the year they leave or return.

Pensions and the State Pension

You can usually draw a UK private pension while living abroad, and a tax treaty will normally decide which country taxes it. Transferring a UK pension overseas is possible only to a qualifying scheme, often carries a 25% charge, and is rarely the simple improvement it is sold as.

The UK State Pension is paid worldwide, but annual increases are only given if you live in the European Economic Area, Switzerland or a country with a social security agreement that covers them. In others, including Australia, Canada, New Zealand and South Africa, it is frozen at the rate first paid. Since 6 April 2026 the cheaper Class 2 route for paying voluntary National Insurance from abroad has been withdrawn and the qualifying conditions tightened, so it is worth checking your record.

Inheritance tax follows residence now

Since 6 April 2025, UK inheritance tax on worldwide assets depends on residence rather than domicile. Broadly, if you have been UK resident for at least 10 of the previous 20 tax years you are a long-term resident, and you can remain within the scope of UK inheritance tax for between three and ten years after you leave. UK assets, including property and pensions, stay within it regardless.

Coming back

The months before a return are the most valuable for planning. Gains realised and income taken while non-resident may be taxed very differently from the same transactions after you arrive, and people who have been away for at least ten years may qualify for a four-year relief on foreign income and gains. Equally, some gains realised during a short absence are taxed on return.

Can an adviser in our network help you?

That depends on where you live. UK-regulated advisers can generally advise UK residents and people about to return; whether they can advise you while you are resident elsewhere depends on that country's rules. Tell us your situation when you book and we will be straightforward about whether we can introduce someone suitable.