The NT Tax Code: How to Get Your UK Pension Paid Gross Abroad

Information only. Nothing on this page constitutes financial, tax, or legal advice. The rules described here are based on information available at the date of publication and can change. A regulated specialist can help you assess your individual position.

A UK pension paid to someone living abroad starts with a quiet inefficiency: the provider deducts UK income tax at source, the country of residence often taxes the same income under its own rules, and the pension holder is left reclaiming from one side or claiming credits on the other. The NT tax code exists to end that cycle. Once it is in place, your UK provider pays your pension gross, with no UK tax held back, and the income is handled once, in the country where you actually live.

For expats drawing or about to draw a UK pension, the NT code is one of the most valuable pieces of administration there is. This guide covers what the code is, who qualifies, how the application works form by form, how long it takes, and what the picture looks like without one. For the wider question of when and how a UK pension can be accessed from abroad, see accessing your UK pension while living abroad.

What Is an NT Tax Code?

NT stands for no tax. It is a PAYE tax code issued by HMRC that instructs the payer of an income source to make payments without deducting UK income tax. HMRC's internal PAYE manual lists several situations in which code NT is used; the one that matters for expats is exemption under a double taxation agreement.

The mechanics are simple. Every UK pension provider is required to operate PAYE on the pension income it pays. Without an instruction from HMRC, it deducts UK tax using whatever code it holds, and on a first flexible withdrawal with no code at all it must use an emergency basis that routinely over-deducts. The NT code replaces all of that with one standing instruction: pay this income gross.

Two boundaries are worth stating plainly. First, the code applies to UK deduction at source, not to tax itself: the income remains taxable, usually in your country of residence. Second, the code attaches to a specific income source. It is issued to the provider named in your claim, which is why the application asks for each pension and its payer reference individually.

Who Qualifies for an NT Code on a UK Pension?

The NT code on double taxation grounds rests on two facts about you and one fact about your country.

You are not UK resident. Residence is decided by the Statutory Residence Test, and the DT-Individual claim asks you to confirm your position under it, including split year treatment if you left part way through a tax year.

You are tax resident in a treaty country. The UK has double taxation agreements with a large number of countries. Where the agreement gives the taxing right on UK pension income to your country of residence, the UK gives up its deduction at source, and the NT code is the instrument that puts that into effect. HMRC's Digest of Double Taxation Treaties (the DT Digest) summarises, country by country, whether relief is available on pensions and which claim form to use.

Your pension is the kind the treaty covers. Most agreements cover work pensions and purchased annuities. Pensions paid for service to the UK government or a local authority follow special rules in many treaties, and under many of them the UK keeps the primary taxing right. A handful of agreements also carry a subject to tax condition, meaning relief depends on the income actually being taxed in your country of residence. The DT Digest entry for your country states both points.

One timing rule surprises almost everyone: HMRC's own form notes state that relief at source on pensions and annuities can only be applied for once the payments have begun. You cannot pre-clear an NT code for a pension you have not started drawing.

How to Apply for an NT Tax Code, Step by Step

The application route for most countries is form DT-Individual, HMRC's combined application for relief at source and claim to repayment. Residents of some countries use a country-specific version (Germany and Sweden have their own forms). The steps run as follows.

1. Confirm your residence position. If you have recently left the UK and do not complete a Self Assessment return, telling HMRC you have left (the P85 process) puts your departure on record. The DT-Individual claim itself asks for your exact date of departure and your position under the Statutory Residence Test.
2. Check the DT Digest for your country. It confirms whether pension relief is available under your agreement, whether any special rules apply, and which form to use.
3. Begin your pension payments. Relief can only be claimed on payments that have started, so the first payment or regular income needs to be in motion. Expect UK tax to be deducted at this stage; it comes back later.
4. Complete the form. Part A covers your personal details, including your National Insurance number and date of departure. Part B covers residence questions. Part C.2 is where each work pension goes, with the provider's name and address, the payer's reference number, and the date payments began. Sending a copy of your latest P60 from the provider helps HMRC make the adjustment.
5. Have your residence certified. For most treaty countries, you send the completed form to the tax authority of your country of residence, which certifies that you are resident there within the meaning of the treaty, then either forwards the form to HMRC or returns it to you to send on. Where a tax authority prefers not to stamp the form, HMRC accepts a separate stand-alone certificate of residence instead. Residents of Bahrain, the British Virgin Islands, the Cayman Islands, Hong Kong, Kuwait, Qatar, Saudi Arabia and the UAE follow a different route set out in the form's Appendix 1, answering additional questions and enclosing a certificate of residence or residence permit rather than obtaining local certification.
6. HMRC issues the code. Once the claim is accepted, HMRC sends the NT code directly to your pension provider. Checking with the provider that the code has landed before a large withdrawal is a sensible final step.

The postal address for HMRC claims is Pay As You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS, United Kingdom.

DT-Individual or P85: Which Form Does What?

The two forms are often mentioned together and do different jobs.

Form P85 is the leaving the UK form. It tells HMRC you have left or are leaving, and it claims back income tax overpaid in the year of departure, typically PAYE deducted on employment income before you moved. HMRC's guidance is explicit that it is not needed if you file a Self Assessment return for the year you leave.

Form DT-Individual is the treaty claim. It is what actually produces the NT code for pension income, and it doubles as a repayment claim for UK tax already taken off.

Many expats end up using both, at different moments: the P85 around departure, and the DT-Individual once pension payments begin. Neither replaces the other, and completing a P85 does not by itself change how a pension provider taxes your income.

How Long Does an NT Tax Code Take?

HMRC does not publish a fixed service standard for double taxation relief claims. In practice the process can take several months from submission to the code appearing with your provider, and the certification round trip through an overseas tax authority is a large part of that.

The waiting period is less costly than it sounds, for one reason: the adjustment is backdated. Where a pension has been taxed under PAYE, HMRC's form notes state that the adjustment goes back to the latest of the date you became tax resident in your new country, the date pension payments began, or the earliest UK tax year still in time for a repayment claim. UK tax deducted while the application was in progress comes back to you; HMRC arranges any refund of PAYE deductions itself.

The sequence that works in practice: the claim goes in as soon as payments begin, larger withdrawals are timed for after the code is in place where possible, and the backdating rules recover the rest.

What Happens Without an NT Code?

Without a code, the default machinery runs. The provider deducts UK tax under PAYE, and on a first flexible withdrawal with no current-year code it must apply the emergency Month 1 basis, which annualises a single payment and frequently over-taxes it. That overpayment is recoverable in-year using HMRC form P55 (or P50Z and P53Z where a fund is fully withdrawn), or through HMRC's end of year reconciliation, but each round of deduct and reclaim is paperwork, delay, and money out of reach in the meantime.

Meanwhile your country of residence may tax the same income under its own rules, leaving you to claim treaty relief by credit or repayment after the fact. The NT code is the clean version of the same outcome: one tax system, applied once, where you live. That difference compounds for anyone planning regular drawdown income across many years, which is why the code is usually worth arranging before large or recurring withdrawals rather than after. You can explore how different withdrawal patterns behave using the pension calculator.

Common Problems a Specialist Checks For

Most failed or stalled applications trace back to a handful of causes, and each is checkable in advance:

• Applying before payments have begun. The claim cannot be processed for a pension that has not started paying, so sequencing the first payment and the application is step one.
• The government pension rule. Pensions for UK government or local authority service keep UK taxing rights under many treaties. Which side of the line a particular scheme falls on is a treaty question, checked against the DT Digest before anything is filed.
• Certification friction. Some local tax authorities are slow to certify or prefer not to stamp foreign forms; a stand-alone certificate of residence is the accepted alternative, and knowing that in advance saves a wasted round trip.
• A code attached to the wrong source. The NT code follows the payer reference. Consolidating pensions, switching provider, or starting income from a second scheme means the relief needs to follow, which is one of the things a review of your UK pension arrangements puts in order before income starts.
• Changed circumstances. The relief rests on your residence position. Moving country again, or a change in the facts given on the form, needs to be reported to HMRC, and a new treaty position may need a fresh claim.

For those weighing a transfer rather than drawing from a UK scheme, the treaty questions interact with a different set of rules, covered in QROPS and overseas pension tax explained and, more broadly, in your UK pension options when moving abroad.

Getting the Paperwork Handled

The NT code sits at the junction of UK pension rules, a specific treaty, and the tax system of the country where you live. The reward is a pension paid gross for as long as the code stands. A cross-border specialist deals with these claims routinely: confirming the treaty position from the DT Digest, sequencing the first payment against the claim, preparing the DT-Individual with the right certification route for your country, and making sure the code reaches every provider that pays you.

If you would like to be introduced to a regulated specialist who works with UK expats on pension access and cross-border tax administration, you can Request a specialist introduction. We review every submission before any introduction is considered. Pharos is an introducer, so there is no cost to ask and no obligation.