What becoming non-resident for tax means
In most countries a resident pays tax on worldwide income and a non-resident only on income from sources inside the country. You become non-resident when you stop meeting every test in the tax residency rules of the country you are leaving. The day you board the plane is not that moment: the old country applies its own law each year, and it does not need to know where you went.
Leaving therefore has 2 parts: failing the old country's tests, and building a residence somewhere else that shows you did. The 7 steps below apply wherever residence decides your tax; the US, which taxes its citizens wherever they live, is the exception.
Step 1: Read the old country's residency test
List every way the old country could still count you. Most use more than 1 test, and meeting any one of them keeps you resident:
- Days. Spain needs more than 183 days in the calendar year (LIRPF, article 9); the UK counts 183 days or more in its April 6 to April 5 tax year (GOV.UK).
- A home. Germany treats you as having a residence wherever you hold an apartment in circumstances suggesting you will keep and use it (AO, section 8).
- Economic interests. Spain makes you resident if the main base of your business or economic interests is in Spain, with no day count at all.
- Family. A spouse or dependent children who stay behind can keep you resident with few or no days in the country.
- Domicile. Some systems also use domicile, which can stay with you long after you move.
Use the old country's own definitions, period and counting rules, never a rule of thumb from somewhere else. The UK's statutory residence test alone has automatic tests, a ties test and its own tax year, and Australia's domicile test keeps an Australian-domiciled person leaving Australia resident unless they have a permanent place of abode outside Australia (PwC, Australia residence).
Step 2: Cut your days below the threshold
Days are the test you control most directly, and in some countries the margin is small. After you leave the UK, you are automatically non-resident with fewer than 16 days there in a tax year if you were UK resident in any of the previous 3 tax years, or fewer than 46 days if you were not, and also if you work full time abroad, averaging at least 35 hours a week, and spend fewer than 91 days in the UK, no more than 30 of them working (GOV.UK). Otherwise, below 183 days the UK next checks whether your only home or a full-time job was in the UK, and only then do your remaining UK ties decide.
Ireland treats you as non-resident in a tax year with 30 days or fewer there, whatever your total over 2 years (Revenue). The rules for counting days for tax residency differ in the details that matter at the margin: Ireland counts any part of a day spent in the country, so a day trip or a late arrival is a full Irish day.
Step 3: Give up the home, or make it unavailable
A home kept ready for you can keep you resident on its own, even when your day count is low. Germany's home test is the apartment you keep and use, and Portugal treats you as resident if, on any day of the period, you have a home you appear to intend to keep as your habitual residence (CIRS, article 16).
Selling the home, ending the lease or renting it out properly are the clean versions. Under tax treaties, a house rented out and handed over to an unrelated tenant is not available to you, so it stops counting as your permanent home (OECD Commentary on Article 4, paragraph 13). An apartment kept empty for your visits is the version that fails.
Step 4: Move your family and your working life
After the home, family and business ties carry the most weight. Spain presumes you are still resident if your spouse, not legally separated, and your dependent minor children live in Spain, unless you prove otherwise (LIRPF, article 9).
Canada weighs the same things when you are leaving Canada for tax: a home, a spouse or common-law partner and dependants are the significant ties, and secondary ties such as a car, furniture or a Canadian driver's license count as well (CRA). Clients, a business address and bank accounts left behind all point back to the old country when a tax office asks where your life is.
Leaving Spain: a clean break and a half break
Clean break
You move from Madrid to Lisbon with your spouse and children on March 1, end the Madrid lease, close the Spanish business and invoice from a Portuguese registration. With about 60 days in Spain that year and no home, family or economic base left there, Spain has nothing to point to, and Portugal treats you as resident from the move (CIRS, article 16).
Half break
You move to Lisbon alone while your spouse and children stay in the Madrid apartment, and your clients keep paying the Spanish business. Spain presumes you are still resident because your spouse and children live there, and the Spanish business keeps the main base of your economic interests in Spain, which is a residence test of its own (LIRPF, article 9). You are now resident in 2 countries.
Step 5: Deregister and tell the tax office
Many countries expect you to tell them you are going, and doing it starts the paper trail. Germany requires you to deregister with the registration office within 2 weeks of moving out of a home without taking a new one in Germany, and lets you do it up to 1 week before (BMG, section 17).
In the UK you tell HMRC on form P85 when you leave the UK if you do not file Self Assessment, or on the residence pages (SA109) of your return if you do (GOV.UK). Canada lets you ask the CRA for an opinion on your status with Form NR73, which is optional.
Deregistering does not make you non-resident
A deregistration certificate shows that you told the authorities you left. It does not move the home, the family or the business. Deregister in Berlin but keep the furnished apartment there for your visits, and Germany's home test can still treat you as resident with the certificate sitting in your drawer.
Step 6: Become tax resident somewhere else
Being resident nowhere, the perpetual traveler plan, is possible on paper, but it leaves you with nothing to show the old country. A new residence gives you a test you meet, a tax return you file there and a tax residency certificate to hand over when the old country asks. Spain writes this into its law: short trips abroad count as days in Spain unless you prove tax residence in another country, and for a move to a country on its tax haven list it can demand proof of 183 days there (LIRPF, article 9).
If the old country still counts you while the new one does too, you have dual tax residency, and a treaty between the 2 decides which claim wins, starting with where you have a permanent home (OECD Model, Article 4(2)). If you have not chosen the new country yet, comparing the full tax setup in 2 or 3 candidates at your income tells you more than their headline rates.
Step 7: Keep proof that you left
When a tax office questions your departure, you are the one who has to show it. Build the file as you go, not when the letter arrives.
Evidence to keep after you leave
- Your day count for every year, by country, backed by flight records, boarding passes and passport stamps.
- Proof that the old home ended: the sale deed, the end of the lease, or a rental agreement with an unrelated tenant.
- Proof that your family moved: their new lease or registration and the children's school enrollment.
- The deregistration certificate, the P85 or NR73, and every reply from the old tax office.
- The new country's residence permit, lease, tax registration, filed returns and tax residency certificate.
- Records of where your business runs: client contracts, invoices and the address printed on them.
Countries that keep a tax claim after you leave
A clean break can still leave the old country a claim for years. Ireland's reaches every leaver who was ordinarily resident there, while the other 3 below reach only people who move to a low-tax country or come back within 5 years:
- Ireland. If you were resident for 3 tax years in a row before you left, you stay ordinarily resident until you have been non-resident for 3 consecutive tax years. If you are Irish domiciled, Ireland can still tax your worldwide income in those years, apart from work done wholly abroad and other foreign income of €3,810 (about $4,340) or less in the year, and your worldwide gains (Revenue, Tax and Duty Manual Part 34-00-01).
- United Kingdom. Under the UK temporary non-residence rule, if you were solely UK resident in 4 or more of the 7 tax years before you left and you come back within 5 years, certain income and gains you received while away are taxed on your return (HMRC, RFIG21510).
- Spain. A Spanish national who moves to a country on Spain's tax haven list stays a Spanish taxpayer in the year of the move and the 4 years after it (LIRPF, article 8).
- Germany. A German national who was resident for at least 5 of the last 10 years and moves to a low-tax country while keeping substantial economic interests in Germany keeps an extended tax liability on German income for 10 years after the year of leaving, in any year that income exceeds €16,500 (about $18,800) (AStG, section 2).
Other countries charge once, on the way out. Canada treats you as having sold most of your property at fair market value when you emigrate, with Canadian real estate among the exceptions (CRA, dispositions of property). Germany's exit tax on shareholdings treats shares as sold at market value when you give up German residence after at least 7 of the last 12 years there, if you held 1% or more of the company's capital at any time in the last 5 years (AStG, section 6; EStG, section 17). Check for an exit tax on unrealized gains before you set the date, because the move itself triggers it.
For US citizens, the steps above change where else you owe tax but not whether the US taxes you: the US taxes its citizens on worldwide income wherever they live (IRS), and the only exit is renouncing US citizenship.
David's note
I would set the departure date by the old country's tax calendar before booking anything else. Spain counts the calendar year, so leaving at the end of June leaves you about 181 Spanish days for that year and almost no room for visits back, while leaving in August puts you past 183 and makes you resident for all of it, whatever else you have moved.
