Good News: Much Simpler Than the US Situation
This is educational content, not tax advice. UK tax law is complex and your personal circumstances determine your obligations. Consult a UK tax adviser with experience in Israeli tax residency for advice specific to your situation.
If you are a UK citizen making aliyah, your post-aliyah UK tax obligations are substantially simpler than those facing US citizens. The UK taxes on residency, not citizenship — so once you genuinely become a non-UK resident, most UK-source income ceases to be taxable by HMRC. There is no UK equivalent of FBAR, FATCA for individuals, or the PFIC rules that trap many American olim.
That said, some UK obligations persist after departure and require proper management. And your Israeli מס הכנסה (Mas Hachnasa) (income tax) obligations begin from the day you become an Israeli resident, running alongside any remaining UK obligations.
The UK Statutory Residence Test (SRT)
Whether you are UK-resident for tax purposes is determined by the Statutory Residence Test (SRT), introduced in 2013. The SRT uses a combination of automatic tests and "sufficient ties" to establish UK residency. The key points for new olim are:
- Automatic non-residence: If you spend fewer than 16 days in the UK during a tax year, you are automatically non-UK-resident. This is the cleanest outcome for olim who have fully relocated.
- Fewer than 46 days: You will be non-resident if you have no UK ties (family, property, work) beyond a minimal level.
- UK ties: If you retain a UK home, a spouse/civil partner in the UK, or significant UK work, you may still be UK-resident even with fewer than 183 days in the UK. The SRT ties test is complex.
For most olim who have genuinely relocated their life to Israel — sold or let their UK property, ceased UK employment, and are spending the majority of the year in Israel — the SRT will classify them as non-UK-resident. This is the assumption for most of what follows.
Notifying HMRC: The P85 Form
When you leave the UK to live abroad permanently or indefinitely, you should notify HMRC by completing Form P85 (Leaving the UK — Getting Your Tax Right). This form tells HMRC that you are leaving, provides your Israeli address, and initiates any tax refund owed for the part of the tax year before you left.
If you were employed in the UK up to departure, you will also need a P45 from your final UK employer. Submit both to HMRC. If you had Self Assessment obligations in the UK, you will need to file a final UK tax return for the year of departure and notify HMRC that you are no longer required to submit returns.
UK Income That Remains Taxable
Even as a non-UK resident, certain categories of UK-source income remain taxable by the UK:
- UK rental income: If you own UK property and receive rent, HMRC taxes that income regardless of where you live. You must register for Self Assessment and file a UK return. The UK-Israel tax treaty provides relief against double taxation.
- UK employment income: If you perform work physically in the UK, that income is taxable by the UK, even as a non-resident.
- UK pension income: State Pension and most private pension income remains taxable by the UK once you start drawing it. The Israel-UK treaty determines the exact treatment.
- UK bank interest and dividends: Generally not taxed by the UK for non-residents after 2016 (the removal of withholding tax on most UK savings). The treaty caps withholding rates on dividends.
Your UK State Pension After Aliyah
Making aliyah does not forfeit your entitlement to the UK State Pension, which you have been contributing toward through National Insurance (NI) contributions during your working years in the UK. If you have 10 or more qualifying years of NI contributions, you will receive some State Pension. A full new State Pension (currently £221.20/week in 2025/26) requires 35 qualifying years.
Key considerations for UK olim and the State Pension:
- Voluntary NI contributions: If you have gaps in your NI record, you can pay voluntary Class 2 or Class 3 contributions to fill them, even from Israel. The cost is relatively low and the benefit can be significant over a long retirement. Check your NI record on the HMRC website (check-your-state-pension.service.gov.uk).
- Pension age: The UK State Pension age is currently 66 and rising. Payments are made globally — you will receive it in Israel once eligible.
- Uprating: Unlike some other countries, Israel has a reciprocal social security agreement with the UK, which generally means your UK State Pension is uprated annually in line with UK increases.
Your קצבת זקנה (Kitzvat Zikna) (Israeli state old-age pension from Bituach Leumi) is entirely separate from your UK State Pension. Both can be drawn simultaneously in retirement.
The Simplified Picture
For most UK olim who have genuinely relocated to Israel and made a clean break — sold or let the UK home, ended UK employment, and completed the P85 process — UK tax obligations reduce to: (1) annual Self Assessment if you have UK rental income, (2) keeping NI contributions current if you choose, and (3) filing a final UK return for the year of departure. The דוח שנתי (Doch Shenati) (Israeli annual return), if required, then becomes your primary annual tax filing obligation going forward.