How to apply for a Nil Tax (NT) Code — UK
As a British pension holder living outside of the U.K getting a Nil Tax (NT) code is of great significance. An NT code means, you won’t pay tax on the income in the U.K and your country of residency.
Not having an NT code means that you would be on emergency tax in the U.K. Thus, meaning that the tax would need to be claimed back. You could also pay tax in the country that you are residing in if you go over the annual tax-free amount.
With a Double tax agreement, between the U.K and a number of countries, you are able to receive your income gross when you draw down any money from a pension.
It works by getting in touch with your government office in the country where you are residing and requesting a form stating that you are a local tax resident.
Then complete, the P85 on the HMRC website.
After this you will receive your NT code, as a result from here on the gross amount will be withdrawn from your pension. One factor is important that you will still need to declare your income in the country where you are a resident and the tax rules still apply.
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