UK To Israel | Financial Planning
Financial Planning for Aliyah: Moving from the UK to Israel
Banking, tax, pensions, and currency — a complete financial checklist for olim making the move from the United Kingdom to Israel.
The move from the UK to Israel means running two financial systems in parallel for a while: closing down or maintaining the UK side cleanly while building the Israeli side from scratch. The olim who find the first year smooth are almost always the ones who did the UK groundwork early — informing HMRC, sorting the P85, deciding on pensions and property, and lining up documents before departure rather than chasing them from Israel. Here's how to sequence it.
Before you leave the UK
The financial groundwork you lay before departure determines how smooth the first year feels. Work through your UK obligations — banking, credit, tax, pensions — before the move, not after.
Banking & accounts. Notify your UK bank of the move and give them a forwarding address. Set up online banking for every account, and consider keeping one UK account open for ongoing obligations. Research international banking options (HSBC, Barclays), understand what's required to open an Israeli account, and obtain certified documents if you'll need them. Set up standing orders for any ongoing UK payments.
Credit & loans. Check your credit score and resolve any issues. Pay off or make a plan for existing debts — student loans, cards, mortgage. Understand how UK credit cards work internationally, consider keeping one active, notify your card companies of the move, and update your address with the credit reference agencies.
Taxes. This is the part worth getting right. Consult a tax professional experienced in UK–Israel taxation, inform HMRC of your departure date and new address, and understand your UK tax residency status under the Statutory Residence Test. Complete a P85 (leaving the UK), research Israeli tax residency rules, and determine whether split-year treatment applies. Keep records of all accounts and assets, and claim any UK tax refunds due.
National Insurance & pensions. Check your NI record and contributions, and understand how leaving affects your State Pension. Review your workplace and private pensions, and consider — with specialist advice — whether to transfer them. Research Israeli equivalents (Keren Hishtalmut, Bituach Menahalim), understand the UK–Israel Double Taxation Agreement, and update beneficiaries on all schemes.
Investments & savings. Review ISAs, stocks and shares, and other investments, and understand the tax implications once you're non-UK resident. ISAs lose their tax benefits when you leave, so consider closing or transferring them. Research Israeli investment options, understand the reporting requirements on both sides, and think carefully about the timing of selling UK assets.
Insurance. Review and update life insurance, and cancel or transfer car insurance. Understand your health coverage during the transition (your EHIC is invalid post-Brexit), research Israeli health insurance through the Kupot Holim, and consider travel insurance to bridge the gap. Update addresses on every policy.
Property. Decide whether to sell or rent your UK home. If renting it out, understand the UK tax on rental income as a non-resident, set up property management, inform your mortgage provider, and update your Council Tax status.
Your first year in Israel
Getting established. Open an Israeli bank account, obtain your Teudat Zehut, and register with the tax authorities (Mas Hachnasa). Choose a Kupat Holim, apply for your Sal Klita (absorption basket) if you're making aliyah, research oleh benefits and tax exemptions, and register with Bituach Leumi.
Income & employment. Understand the Israeli salary structure (gross vs. net works differently from UK PAYE), and negotiate pay with the local cost of living in mind. Set up pension contributions with your employer, understand Israeli employment law and benefits, and if you're self-employed, register as an Osek Patur or Osek Murshe. Plan for irregular income during the transition, and understand your social-security contributions.
Currency & transfers. Set up a reliable method for moving money between countries, and compare exchange-rate services (Wise, CurrencyFair, OFX) rather than defaulting to the banks. Understand shekel–pound fluctuations, plan a currency strategy for any large purchases, keep emergency funds in both currencies, and close UK accounts you no longer need.
Housing & living costs. Budget for an Israeli cost of living that's generally higher than the UK. Understand the rental market (Arnona, Vaad Bayit fees), factor in utilities (electricity is expensive), and budget for furniture and household setup. Research transport costs (car vs. public transit) and plan for higher food and consumer-goods prices.
Ongoing considerations
Annual requirements. File a UK self-assessment return if still required (deadline 31 January), file Israeli taxes (usually due 30 April), and report foreign income to both countries as required. Keep records of UK-source income, claim relief under the tax treaty where applicable, and keep up voluntary NI contributions if you're maintaining your UK record.
Long-term planning. Build an emergency fund in shekels (3–6 months of expenses), contribute to Israeli retirement savings, and review your UK State Pension forecast annually. Consider voluntary NI contributions to protect that pension, plan for children's education costs, weigh up buying property in Israel, update your will and estate planning for both countries, and review your investment strategy for dual residency.
Professional help. Find an English-speaking accountant in Israel, maintain your UK accountant if needed, and engage a financial adviser familiar with cross-border issues. Above all, consult a pension-transfer specialist before moving any UK pension. Joining UK expat groups in Israel is a useful informal source too.
UK versus Israel, at a glance
Financial system. Israel uses the shekel (₪ / ILS). Salaries are paid monthly with tax deducted at source, but the system differs from UK PAYE. The tax year runs January–December, not April–April. There's no Israeli equivalent to the ISA, banking fees are generally higher, and debit cards are less common than in the UK.
Taxation. Israeli income-tax rates are broadly similar to the UK's, and VAT is 18% (lower than the UK's 20%). There's no Council Tax equivalent — Arnona is property-based — and capital gains tax applies differently. The UK–Israel tax treaty prevents double taxation.
New immigrants still receive a 10-year exemption on foreign income. Note the recent change, though: olim who become Israeli tax-resident from 1 January 2026 onward must now report worldwide income and foreign assets annually, even where that income remains exempt from Israeli tax during the 10-year window. The exemption survives; the reporting obligation is new. This is exactly the kind of detail to confirm with a cross-border specialist.
Social security. Bituach Leumi is mandatory, with percentage-based contributions similar to UK NI. The Israeli State Pension age is lower than the UK's, and workplace pensions are mandatory. There's no equivalent to the UK benefits system until residency is established.
Cost of living. Generally higher than most UK cities and comparable to London. Cars and electronics are more expensive, public transport is less extensive, and healthcare is effectively universal (though supplemental insurance is recommended). Food costs vary — fresh produce is cheaper, imports dearer.
Documents to bring
Carry these certified and ready: birth certificates (original and apostilled); marriage certificate if applicable (original and apostilled); proof of UK address (utility bills, Council Tax); bank statements for the last six months; your P45 or P60; pension statements; educational certificates and diplomas; employment references; your driving licence (exchange within one year); medical records; and proof of Jewish heritage if making aliyah.
A critical timeline
3 months before: inform HMRC of your departure, begin closing unnecessary accounts, research Israeli banks and their requirements, and consult tax advisers in both countries.
1 month before: submit your P85 to HMRC, set up mail forwarding, transfer emergency funds to an accessible account, and finalise your UK property arrangements.
Upon arrival: register your address in Israel within 30 days, open a bank account immediately, register for health insurance, and begin the tax registration process.
First 3 months: complete all registration requirements, set up utility payments, establish your financial routines, and begin building a local credit history.
Where to get authoritative help
In the UK: HMRC International (tax obligations and residency), the DWP International Pension Centre (State Pension queries), and the gov.uk "Living abroad" pages (departure procedures).
In Israel: Nefesh B'Nefesh (comprehensive aliyah guidance), the Ministry of Aliyah & Integration (benefits and support), and the Israel Tax Authority / Mas Hachnasa (tax information).
Two systems, one plan
Two areas deserve specialist attention above all others: pension transfers and the UK–Israel Double Taxation Agreement. Both are technical, both carry real money, and both are far cheaper to get right with advice than to unwind later. An English-speaking accountant in Israel and a UK adviser who understands cross-border issues are worth engaging before the move — not after the first tax deadline.
Get the UK groundwork done early, keep both sides documented, and lean on the right specialists for the two areas that matter most. Do that, and the financial side of your aliyah becomes a sequence to work through rather than a crisis to manage.
This checklist is general guidance, not personal financial or tax advice. Figures, thresholds, and rules change — confirm current rates with a qualified professional before acting.
Olim Advice — free advice for every oleh. Planning the financial side of your move and want a second pair of eyes on the sequence? Visit olimadvice.com and we'll help you order the steps and point you to the right specialists.