Why you need an NT Tax code if you are no longer living in the UK.

What is the NT tax code

The NT tax code is a special tax code used in the UK that stands for **”No Tax.”** If you’re given this code, it means you won’t have any income tax deducted from your pension payments. This can be particularly useful if you’re receiving a pension from a country that has a **Double Taxation Agreement (DTA)** with the UK, or if your pension is already being taxed in another country.

In simple terms, the NT tax code ensures you’re not taxed twice on the same income—once in the UK and once abroad.

More often than not people apply for the NT Tax code as they want to make sure they get their pension paid gross to them and they can therefore pay the tax in the country they now reside, if that is not the UK.

Why have the NT tax code?

The NT tax code exists to prevent **double taxation**. Many countries have agreements with the UK to ensure that income (like pensions) is only taxed once. For example, if you’re receiving a pension from a country like Australia, Canada, or the USA, you might already be paying tax on that pension in that country. Without the NT tax code, you could end up paying tax on the same income again in the UK.

The NT tax code is there to make sure you’re treated fairly and only pay tax where it’s due.

Who Can Apply for the NT Tax Code?

Not everyone can apply for the NT tax code. You’ll need to meet certain criteria:

1. **You’re receiving a pension from outside the UK**: This could be a state pension, workplace pension, or private pension from another country.

2. **Your pension is already being taxed in that country**: If you’re paying tax on your pension abroad, you may be eligible for the NT tax code in the UK.

3. **There’s a Double Taxation Agreement (DTA) in place**: The UK must have a tax treaty with the country where your pension is being paid.

If you’re unsure whether you qualify, it’s a good idea to speak to a financial advisor or contact HMRC directly.

How to Apply for the NT Tax Code

If you’ve left the UK and are receiving a pension from the UK, you may want to apply for the NT tax code to ensure you’re not taxed in the UK on that income. Here’s how to apply:

1.Contact HMRC from Abroad

   Even if you’re no longer living in the UK, you can still apply for the NT tax code. You’ll need to get in touch with HMRC’s International Pension Centre. You can call them at **+44 (0)191 218 7777** (from outside the UK) or write to them at:

   International Pension Centre

   HM Revenue and Customs

   BX9 1AN

   United Kingdom

Or contact them here https://www.gov.uk/tax-uk-income-live-abroad/taxed-twice 

2. Provide Proof of Residency:

   Since you’ve left the UK, you’ll need to prove that you’re now a resident in another country. This might include:

   – A copy of your residency permit or visa.

   – A letter from the tax authority in your new country confirming your tax residency.

3. Show Evidence of Tax Treatment:

   You’ll also need to demonstrate that your pension is being taxed (or will be taxed) in your new country of residence. This could include:

   – A letter from your pension provider showing the tax deductions.

   – Proof of a Double Taxation Agreement (DTA) between the UK and your new country.

4. Fill Out the Forms:

   HMRC will send you the necessary forms to complete. These may include a **P85 form** (if you’ve recently left the UK) or other relevant paperwork. Make sure you fill these out accurately and return them as soon as possible.

These forms can be completed online here https://www.gov.uk/tax-uk-income-live-abroad/taxed-twice

5. Wait for Confirmation:

   Once HMRC processes your application, they’ll issue you with the NT tax code. However, at the moment, it’s taking 3-6 months for applications to be processed, so be prepared for a wait.

Why Act Now?

If you’ve left the UK and are still receiving a UK pension, applying for the NT tax code can save you from being taxed twice—once in the UK and once in your new country. With HMRC currently taking 3-6 months to process applications, it’s important to act sooner rather than later to avoid unnecessary tax deductions.

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