Moving to Spain: what you need to do about your UK taxes

You have made the decision. Before you go, there are a few things HMRC needs to know — and a few things you need to know about your final UK tax year. None of it is complicated if you handle it in order, but the consequences of leaving things undone follow you across the border.

Here is what to do, step by step.

Notify HMRC you are leaving — the P85

The first and most important step is to formally tell HMRC you are departing.

Form P85 — “Leaving the UK: getting your tax right” — notifies HMRC of your departure and the date you are leaving. Two things happen as a result. HMRC can calculate your tax correctly for the year in which you leave, which often results in a refund if you have been paying through PAYE. And it establishes the formal date of your departure, which matters significantly for the Statutory Residence Test.

You can submit the P85 online through the HMRC portal. There is no fixed deadline, but submitting around the time you leave — or shortly after — is the right approach. Waiting too long can complicate your tax position and cost you refunds you are entitled to.

The Statutory Residence Test: how many days you can return

The Statutory Residence Test (SRT) is the mechanism the UK uses to determine whether you are a UK tax resident. What many people do not realise is that becoming non-resident does not mean you can spend unlimited time in the UK without consequence.

The basic position: more than 183 days in the UK in a tax year makes you automatically resident. But the limit is lower than most people expect if you have UK ties — a home, a job, family. In some cases, 45 or 90 days is enough to maintain UK residence for that year.

This matters both for the year you leave and for subsequent years. If you visit the UK regularly after moving — to see family, for work, for any reason — you need to know your specific day count limit for the year. Exceeding it can mean you continue to pay UK tax on your worldwide income for that year, regardless of where you now live.

A review of the SRT as it applies to your specific situation — days in UK, ties, type of work — is one of the most useful conversations to have before you move.

Your final UK Self Assessment

Leaving the UK does not cancel your obligation to file a Self Assessment return for the last tax year in which you were resident. If you are self-employed, a limited company director, or have rental income from UK property, that filing is still required.

What changes is the period you are assessed on. You typically only pay UK tax on the proportion of the year when you were resident — if you left in September, broadly just the period to September. This is called split year treatment, and it can significantly reduce what you owe.

The filing deadline is the same as always: 31 January for online submissions. Leaving the country does not extend it, and late-filing penalties apply regardless of where you are based.

One important note: if you continue to receive rental income from UK property after your move, that income remains subject to UK tax indefinitely, irrespective of your residence status. The Non-Resident Landlord Scheme sets out how that tax is collected.

If you have a UK limited company

This is the situation that generates the most questions. If you run a limited company in the UK and you are moving to Spain, you have three main options.

Keep it trading. If you continue billing through it, your obligations — annual accounts, CT600, Companies House Confirmation Statement — continue as normal. As a director now resident in Spain, there is also the question of whether the company has any Spanish tax obligations, depending on where management and control is effectively exercised. This is worth checking rather than assuming.

Make it dormant. If you want to pause activity without closing the company, you can notify Companies House that it is dormant. Filing requirements simplify, but do not disappear entirely — you still need to file annual accounts and the Confirmation Statement.

Close it. If the company has served its purpose, a formal dissolution — either Members’ Voluntary Liquidation or a Companies House strike-off — brings it to an end. Distributions on closure may qualify as capital gains rather than income, which can be more tax-efficient depending on your circumstances.

The right choice depends on your plans. What does not work is simply ignoring it. Companies House continues to require filings regardless of where the director lives.

Your UK pension and savings

If you have a UK pension — a workplace pension, personal pension, or SIPP — it stays in the UK and does not disappear when you move. But it will have implications in Spain when you start drawing on it.

The UK–Spain Double Taxation Treaty determines where pension income is taxed. In most cases, private sector pensions are taxed in Spain once you are a Spanish tax resident. UK government service pensions (civil service, NHS, armed forces) are generally taxed in the UK.

ISAs and other UK savings products are also worth reviewing before you leave. The UK tax exemption they carry does not transfer to Spain — once you are a Spanish resident, the income and gains within an ISA may be treated differently by the Spanish tax authority.

Neither pension nor savings planning should be done in a rush. If you have significant assets in either, a brief conversation with someone who knows both tax systems before you move can save a meaningful amount.

The Beckham Law: if you are moving for work, read this

If you are moving to Spain for employment or to start a business, and you have not been a Spanish tax resident for the previous ten years, you may qualify for the Régimen Especial de Impatriados — commonly known as the Beckham Law.

Under this regime, you are taxed as a non-resident in Spain for up to six years. Instead of paying Spanish income tax at progressive rates up to 47%, you pay a flat rate of 24% on income up to €600,000. For high earners or those with significant employment income, the difference is substantial.

The application window is six months from the date you start your activity in Spain. It cannot be claimed retroactively. If you think you might qualify, this is the first thing to explore, not an afterthought.

We have a full guide on the Beckham Law page.

The order that matters

The practical list is not long. Notify HMRC via the P85. Understand your day count under the SRT. File your final UK Self Assessment. Decide what happens to your company if you have one. Check whether the Beckham Law applies before the six-month window closes.

Done in order, none of this is overwhelming. Left unattended, several of these items have financial consequences that can take years to unravel.

If you want to work through your specific situation before you move, book a free consultation and we will map out exactly what needs to happen. We advise in both English and Spanish, and we work with clients on both sides of this move.