Moving to Europe brings new and more complex tax responsibilities. Every European country has its own tax system and you will probably have UK tax obligations after leaving. Understanding tax residency, double tax treaties and how your pensions, property and investments will be taxed is essential to avoid unexpected penalties and costs.
Each European country has its own tax rules, filing systems and treatment of foreign assets and these often differ significantly from the UK.
Most European countries have double tax agreements (DTAs) with the UK, designed to help prevent the same income being taxed twice. However, these treaties do not apply automatically and need to be interpreted correctly.
Understanding tax residency, your ongoing UK tax responsibilities and how your income, pensions and assets will be treated in your chosen European country is essential before you move.
This article provides general guidance and should not be considered tax or financial advice. Rules vary by country and change regularly. If you need personalised support, we can introduce you to a relevant tax specialist. We also have more detailed guides on specific jurisdictions.
The EU does not administer income tax, capital gains tax or wealth taxes for member states. Each country sets its own rules. For example:
Assuming that taxation across Europe is broadly aligned with the UK can lead to costly mistakes.
The UK has double tax treaties with most European countries. These agreements help determine which country has the right to tax:
Treaties do not eliminate tax by default. You may need to apply for relief or provide proof of taxes paid elsewhere.
The UK uses the Statutory Residence Test (SRT), which considers:
Even after leaving the UK, it is possible to remain UK tax resident unintentionally if strong ties remain.
In the tax year you leave the UK, you may not be treated as UK tax resident for the full tax year. Under Split Year Treatment, the year can be divided into:
Split Year Treatment is not automatic. It applies only if you meet specific conditions, which depend on whether you are:
Correctly applying Split Year rules may reduce double taxation and help align your UK and European tax filings.
Most European countries consider:
Once tax resident, you may become liable on your worldwide income, not only local income.
You may still have UK tax responsibilities if you keep UK-based income or assets.
You may need to file Self Assessment if you continue to receive:
Leaving the UK does not automatically remove you from UK Capital Gains Tax. If you sell UK residential property while living abroad, you will normally still be subject to UK CGT and must submit a 60-day CGT return and pay any tax due within that deadline. A key exception is where the property qualifies in full as your main residence, which may reduce or eliminate CGT, subject to conditions and periods of occupation.
For non-property assets, the rules are more nuanced. In many cases, once you are non-UK tax resident, gains on non-UK assets fall outside UK CGT. However, if you return to the UK within a certain timeframe, the temporary non-resident rules may apply. This can mean UK CGT becomes due on gains realised while abroad if you were non-resident for fewer than five complete tax years.
Because timing can materially affect the tax due in both the UK and your new country, people intending to sell UK property, shares or other assets often benefit from advice before they become tax resident abroad.
For a full explanation and understanding, see our article: Capital Gains Tax for Expats and Non-Residents
From April 2025, the UK is moving to a residence-based Inheritance Tax system, which means your exposure to UK IHT may continue even after leaving if you have been UK tax resident for 10 out of the previous 20 tax years.
UK assets, such as property, normally remain within the IHT net regardless of where you live, but non-UK assets may also be in scope depending on your UK residency history. If you are planning a long-term move, it can be important to understand when your UK IHT exposure may taper or end.
It is also essential to consider inheritance and succession rules in your destination country. Europe does not have a single inheritance tax regime and several countries apply forced-heirship rules, meaning part of your estate may have to pass to certain family members, regardless of your will.
Some countries tax the heir, rather than the estate, and many do not have Inheritance Tax treaties with the UK, which may create a risk of double taxation if no planning is done.
People relocating to Europe with property, pensions, savings or family wealth in more than one country often benefit from speaking to a UK and local adviser to coordinate cross-border estate planning and ensure their wills reflect their new circumstances.
Departure should be reported via a P85 or Self Assessment so HMRC has a clear record of your change of status.
If you continue to have UK tax reporting duties after you move, you will usually need to complete a Self Assessment tax return.
However, the standard online filing system does not always support the forms required to correctly report non-resident status and claim double tax relief. In many cases, non-residents must either file using commercial tax software or submit a paper return including the relevant supplementary pages (such as SA109).
Because HMRC needs sufficient evidence to accept your non-resident position, many people seek professional help the first time they file as a non-resident to ensure the return is completed correctly and their residency status is clearly established.
Many UK tax-efficient assets lose their benefits once you become tax resident elsewhere.
Examples include:
|
Asset / Income |
Typical changes |
|
ISAs |
Often no longer tax-exempt and may be taxed annually |
|
Investment funds/ETFs |
May be taxed less favourably than in the UK |
|
Pensions |
May be taxed by the UK, European country, or both depending on treaty terms |
|
Dividends and rental income |
May attract different tax rates and/or social charges |
|
Crypto and digital assets |
Reporting and taxation vary significantly |
If you are a director or shareholder of a UK limited company and plan to keep receiving salary or dividend income after moving to Europe, it is important to understand how this may be taxed.
Many European countries will treat dividends from a UK company as taxable foreign investment income, and rates can differ significantly from the UK. Some countries also apply social taxes or surtaxes in addition to income tax.
Under most double tax treaties, the UK may still withhold tax on dividends, but your new country of residence may have the primary taxing right. You will normally need to declare the income locally and then claim any treaty relief to avoid double taxation.
People running a business from Europe should also confirm whether their move creates a tax presence or “permanent establishment” in the new country, which may trigger local corporation tax or reporting requirements.
If you own a company or receive dividends, it is usually best to get both UK and local tax advice before changing residency, as restructuring options may be more effective before the move.
When you move to Europe, you may find that your tax liabilities must be calculated and paid in different currencies.
UK taxes are paid to HMRC in pounds sterling (GBP), while most European countries require tax payments in euros (EUR). If your income, pensions or asset sales are in one currency but your tax is due in another, currency fluctuations can create unexpected gains or shortfalls, even when your underlying income has not changed.
For example, if you owe UK CGT on a property sale but hold most of your wealth in euros, a shift in the exchange rate could mean you need to convert more euros than expected to cover the GBP tax bill.
Similarly, if you owe tax in Europe but hold funds in pounds, you might overpay or underpay if the exchange rate moves between calculation and payment.
Careful planning, and in some cases using a specialist currency provider, can help reduce the risk of currency-related tax problems and support better timing of transfers.
If a significant transaction or tax payment is expected, many people find it useful to discuss currency strategy alongside tax planning, especially when relocating with property, pensions or investment income.
Some countries require reporting of overseas assets, including bank accounts and investments, for example:
In some European countries, wealth taxes may also apply.
The following timeline should help you understand when reading and researching is enough and when you should start speaking to specialists and taking action to stay compliant with all applicable tax rules.
Technically you can manage your taxes yourself, however, even UK tax matters get much more complex and stressful once you move abroad. Local taxes can be nuanced and forms are rarely translated into English, so local assistance is a must to ensure that you don’t make any mistakes.
If you already know that you are moving to Europe, or are close to making that decision, we can introduce you to a UK and local tax specialist who can:
This service is not designed to fill general knowledge gaps. It is most useful when:
Requesting an introduction is free and you may also be eligible for a free discovery call with one of our trusted partners. There is no obligation to proceed with paid advice.
