¿Te preocupa what happens to tax-free savings when leaving the UK? Many savers face a simple but urgent dilemma: keep Premium Bonds that feel safe and tax-free in the UK, or use the ISA allowance before relocating to protect future tax efficiency. This guide explains the exact rules, practical steps and likely outcomes so decisions can be made confidently and without jargon.
Key takeaways: what to know in one minute
- If moving abroad, existing Premium Bonds can usually be kept, but new purchases typically require UK residency — check NS&I rules and the address on file.
- ISA subscriptions stop on leaving the UK. Existing ISAs remain tax-free, but cannot be topped up while non-resident (exceptions apply for Crown service and certain diplomats).
- Tax treatment abroad varies: prizes from Premium Bonds are tax-free in the UK but may be taxable in the new country of residence. ISA tax-free status is UK-specific and usually not recognised abroad.
- Maximising ISA allowance before leaving often makes sense for those expecting foreign tax treatment, but individual factors (risk appetite, expected returns, residency country) matter.
- Inheritance and spouse rules differ: ISAs have a mechanic for a surviving spouse (additional permitted subscription); Premium Bonds need claims via NS&I and are part of the estate.
Should savers moving abroad keep premium bonds?
Existing Premium Bonds holdings can generally be retained after becoming non-UK resident. NS&I allows account holders who move abroad to continue holding existing bonds, and prizes will still be paid. However, the ability to buy more Premium Bonds usually depends on residency status at the time of purchase.
Key practical points:
- NS&I's terms require an address and contact details; updating contact information is essential to continue receiving prize notifications and payments. Use the official NS&I online service: NS&I Premium Bonds.
- Non-UK residents often cannot use UK bank faster-payments for prize payments; NS&I may pay into a nominated UK account — check feasibility before leaving.
- Prize payments remain tax-free in the UK because Premium Bond prizes are not interest; however, resident tax authorities abroad may treat prizes as taxable income. Investigate local rules.
When keeping Premium Bonds while abroad, check manually for country-specific restrictions (see tax and residency section), update NS&I records and plan how to receive any winnings.
When to use your ISA allowance before relocating
Before leaving the UK, using the current tax year's ISA allowance (the annual subscription limit) can be a highly effective, low-cost move. Reasons to consider doing so now include:
- Preserve UK tax-free growth for the money that might be taxed abroad later. Once subscriptions are made, the money inside the ISA retains its tax-free status in the UK even after moving.
- Avoid lost allowance years: while non-resident, the saver usually cannot open or subscribe to ISAs, so unused allowance for that tax year is permanently lost for the period of non-residence.
- Lock in modern ISA features: some ISAs (e.g. stocks & shares) offer exposure to higher long-term returns compared with the expected prize yield of Premium Bonds.
Timing and tactical points:
- If relocation occurs mid-tax year (UK tax year runs to 5 April), consider subscribing before leaving to ensure the allowance is used. Contributions count by tax year.
- Choose the ISA type based on objective: cash ISA for short-term security and liquidity; stocks & shares ISA for medium/long-term growth. This decision should factor in expected residence abroad and local taxation.
- If uncertain about the country of future residence or its tax treatment, diversify: hold some funds in an ISA and keep some in Premium Bonds for liquidity and prize potential.
Tax and residency rules for premium bonds abroad
Premium Bonds are a UK product administered by NS&I. The UK treats prize money as tax-free gambling-style prizes rather than interest or dividends; however, a resident-country tax authority may classify prizes differently.
Practical country examples (indicative at time of writing, 2026-01-28):
- United States: The US generally taxes worldwide income for US tax residents and citizens. Premium Bond prizes are typically treated as taxable income by the IRS. Check IRS guidance and consider reporting requirements for foreign accounts and prizes: IRS.
- Spain: Spanish residents are usually taxed on worldwide income. Premium Bond prizes may be taxed; local rules and double tax treaties can affect treatment. Seek local tax advice and check double taxation relief.
- France: French residents must declare global income; prizes may be taxable under specific categories.
- Australia/Canada: Both tax worldwide income and normally treat prizes as taxable.
Action checklist:
- Check the tax rules for the destination country before leaving — consult HMRC guidance and local tax authorities.
- Keep clear records of premiums paid and prizes won; retention of NS&I statements simplifies foreign tax reporting.
- Seek cross-border tax advice if the sums are material; application of tax treaties may reduce double taxation but often requires claims and documentation.
Sources and guidance links:
- HMRC residency and domicile guidance: HMRC
- NS&I Premium Bonds information: NS&I
ISA versus premium bonds: expected returns and risk
Comparison summary in plain terms:
- Premium Bonds: potential prize-based return, capital guaranteed (face value preserved), no interest paid, low liquidity (cashable but prize timings matter), tax-free in UK but possible foreign tax exposure.
- ISAs: tax wrapper rather than product. Inside a cash ISA, interest rates are explicit (often low but fixed or variable). Inside a stocks & shares ISA, returns are market-dependent and carry risk of capital loss.
Example scenarios (illustrative, not predictions):
- If the Premium Bonds prize fund rate is around 3.7% (indicative at time of writing), returns are stochastic — many small savers may earn less or nothing in a year, while some win larger prizes.
- A cash ISA offering 3.0% guaranteed interest may deliver steadier, predictable returns; a stocks & shares ISA historically offers higher long-term returns but with volatility.
Simple numerical comparison (example):
- £10,000 in Premium Bonds with an indicative prize fund 3.7% might produce an expected (average) return of £370 a year, but that is probabilistic.
- £10,000 in a cash ISA at 3.0% would yield £300 in interest, paid predictably.
Decision drivers:
- If priority is capital and predictable income, a cash ISA may be preferable.
- If seeking potential upside with state-backed capital protection, Premium Bonds offer a unique combination.
- If moving abroad where ISA benefits are not recognised, the ISA's UK tax wrapper may not deliver expected home-country tax advantages; Premium Bonds may still face foreign tax on prizes.
Access, transfers and withdrawals for ISAs and premium bonds
Accessibility rules and practical steps differ markedly between the two products.
Premium Bonds:
- Cashing in Premium Bonds is straightforward: request redemption via the NS&I online account or by post; funds are usually paid into a nominated UK bank account.
- If abroad, ensure a UK bank account remains available for prize payments or set up international arrangements in advance.
- There is no formal ISA-style transfer mechanism because Premium Bonds are not ISAs (unless held within a Stocks & Shares ISA wrapper, which is rare). Premium Bonds are an NS&I product only.
ISAs:
- ISAs can be transferred between providers; transfers preserve tax-free status provided the transfer process follows ISA transfer rules.
- While non-resident, new subscriptions are generally not allowed, but existing ISAs remain valid and accessible for withdrawals.
- If returning to the UK later, a saver can resume subscriptions only after UK residency is re-established.
Practical recommendations:
- Plan how to receive funds if relying on prize payments while abroad — update NS&I with a UK bank account and contact details.
- If keeping an ISA, know whether the provider allows online management from abroad and whether the provider imposes any account access restrictions for non-UK residents.
- Transfer-in/out: ISAs can be moved to other UK providers while abroad, but new subscriptions remain restricted.
Inheritance and gifting: premium bonds versus ISAs
Both Premium Bonds and ISAs form part of the estate on death and will generally be subject to inheritance tax (IHT) rules where applicable. Differences exist in how they are administered.
Premium Bonds:
- NS&I has a claims process for the estate. The bonds are included in the deceased's estate valuation for IHT.
- Prizes that occur after death and before administration can be payable to the estate; executors must follow NS&I instructions.
ISAs:
- ISAs are included in the estate for IHT purposes. However, there is a specific rule for surviving spouses and civil partners: the Additional Permitted Subscription (APS) allows the surviving spouse to subscribe an amount equivalent to the deceased's ISA value, in addition to their own ISA allowance. More detail is available at GOV.UK: Inherit an ISA.
Gifting and nominee arrangements:
- Gifting monies into Premium Bonds or ISAs before a move can have tax and IHT consequences. Timing matters: gifts made less than seven years before death can still affect IHT.
- Nomination forms and clear beneficiary instructions help executors locate accounts and prevent delays.
Advantages, risks and common mistakes
Benefits / when to apply ✅
- Use ISA allowance before leaving if residency abroad will restrict future ISA subscriptions and the saver values UK tax-free growth.
- Keep Premium Bonds if capital preservation and state backing matter, and if the saver expects to retain a UK bank account to receive prizes.
- Combine both: split savings into an ISA (for tax-free growth) and Premium Bonds (for capital guarantee and up-side prizes).
Errors to avoid / risks ⚠️
- Assuming ISA tax-free status is respected abroad — this is often not the case.
- Failing to update NS&I and ISA provider with a new address — this can block communications and payments.
- Neglecting foreign tax reporting — prizes or gains may need declaring in the new country of residence.
- Leaving all liquid savings in one wrapper — diversification reduces tax and operational risk, especially when moving internationally.
Practical checklist: actions before, during and after relocation
- If planning to leave the UK this tax year, maximise ISA subscriptions where affordable and aligned with risk tolerance.
- Update contact and bank details with NS&I and ISA providers before departure.
- Obtain official statements showing holdings, purchase dates and prize history for tax filing abroad.
- Seek basic local tax guidance in the destination country, particularly for large expected prizes or holdings.
Premium Bonds vs ISA: quick decision map
Keep premium bonds
- ✓Capital preserved
- ⚡Chance of large tax-free prizes (UK)
- ✗Possible tax abroad
Use ISA allowance
- ✓Tax-free growth in the UK
- ⚡Predictable returns with cash ISA
- ✗May not be tax-advantaged abroad
Comparative table: Premium Bonds vs ISAs (key points)
| Feature |
Premium Bonds |
ISA (cash / stocks) |
| Can be kept after leaving UK |
Yes, usually — but buying more may be restricted |
Yes, existing ISAs stay open; new subscriptions usually stop |
| Tax status in UK |
Prizes tax-free in UK |
Interest/dividends/gains tax-free in UK |
| Likely tax abroad |
Often taxable as income in many countries |
Often taxable abroad; wrapper recognition varies |
| Access & liquidity |
Cashable; prize timing may delay returns |
Highly liquid (cash ISA) or subject to market (stocks ISA) |
| Inheritance/IHT |
Included in estate; NS&I claims process |
Included in estate; spouse APS rules apply |
Frequently asked questions
Can a non-resident buy premium bonds?
Most of the time, new Premium Bond purchases require UK residency. Existing holdings can usually be retained, but buying more after moving is often restricted. Check NS&I terms.
Can a non-resident top up an existing ISA?
Generally no. HMRC rules prevent non-UK residents from subscribing to ISAs, with narrow exceptions (Crown service, certain military/diplomatic exceptions).
Are Premium Bond prizes taxed abroad?
Often yes. Many countries tax prizes as income; outcomes depend on local law and double-tax treaties. Keep records and consult local tax guidance.
If leaving mid-tax year, should the ISA allowance be used?
If affordability and goals align, using the ISA allowance before leaving often makes sense, since non-residency typically blocks future subscriptions.
How are ISAs treated for inheritance?
ISAs are part of the estate for IHT. Surviving spouses can use the Additional Permitted Subscription to inherit ISA value in addition to their own allowance; follow GOV.UK guidance.
What practical steps help manage Premium Bonds from abroad?
Update NS&I contact and bank details, keep a UK bank account for payments if possible, and secure official statements for foreign tax reporting.
Can someone transfer an ISA while living abroad?
Yes. ISA transfers between UK providers are allowed; transfers preserve tax status. However, transfers do not permit new subscriptions while non-resident.
Your next step:
- Maximise the current UK ISA allowance if leaving this tax year and the funds suit long-term goals.
- Update NS&I and ISA provider contact details and obtain formal statements to help with foreign tax reporting.
- Check the destination country's tax treatment for prizes and ISAs and seek local tax advice if holdings are substantial.