Tax Benefits for New Immigrants from the UK in 2026

Why Is This Especially Relevant for New Immigrants from the UK?

Many immigrants from the UK do not want to immediately sever their existing employment connection. In some cases, they are high-tech professionals, executives, consultants, specialists, or members of the liberal professions who want to move to Israel while continuing to work for their current UK employer. This is precisely where the interesting connection arises between the Israeli tax benefit and the international employment structure.

When the move to Israel does not necessarily involve changing employers, but rather continuing to work under a UK employer, a particularly attractive tax outcome may arise. On the one hand, the employment income may fall within the scope of the Israeli exemption, provided that the legal conditions and the relevant cap are met. On the other hand, it may also be possible to avoid double exposure at the social security level, subject to the terms of the agreement between Israel and the UK.

This option is especially relevant for those seeking to create a gradual and smart transition. Instead of abruptly cutting ties with the workplace, immediately signing a new employment arrangement, and losing employment continuity, it may be possible to structure a move in which immigration to Israel takes place while preserving part of the existing framework. Of course, this is not an automatic outcome, but when the move is reviewed properly, it may be highly efficient.

Double National Insurance Between Israel and the UK – How the Agreement May Help

In addition to income tax, one of the most important issues in a move between countries is the question of social payments. When an employee moves to Israel but remains connected to a UK employer, the question may arise whether they must pay National Insurance contributions or equivalent payments both in Israel and in the UK.

The social security agreement between Israel and the UK was intended to address exactly these situations. In appropriate cases, it allows avoidance of double payment of National Insurance contributions or equivalent social charges. In practical terms, a person who immigrates from the UK to Israel, including someone who continues to work for a UK employer while in Israel, will not necessarily be required to make double National Insurance payments. Instead, they may pay social security contributions or equivalent charges in only one of the countries, depending on the rules of the agreement and the circumstances of the case.

The agreement regulates the liability of those who are situated between Israel and the UK. For example, it includes mechanisms that may apply when a resident of one country is sent by their employer to work in the other country. In such cases, and subject to the arrangements set out in the agreement, it may sometimes be possible to prevent double payment. Accordingly, a new immigrant from the UK to Israel who remains employed by a UK employer may, in appropriate cases, continue paying social security contributions in the UK only, without also paying National Insurance contributions in Israel.

That said, it is important to distinguish between National Insurance contributions and other payments. Even where relief is available under the agreement in relation to National Insurance contributions, payments relating to health insurance may still apply in Israel. Therefore, anyone planning to rely on the agreement should examine carefully the exact scope of the relief and which payments may remain in force.

What Is the Practical Result of Combining These Two Mechanisms?

When the Israeli income tax exemption operates together with the applicable provisions of the social security agreement, the result may be particularly beneficial for new immigrants from the UK to Israel. This applies mainly to those who immigrate to Israel during the period from 5 November 2025 through the end of 2026, become Israeli residents, and continue working for a UK employer.

If their employment income falls within the Israeli exemption, no Israeli income tax will be paid on that employment income up to the relevant cap. If, in addition, the conditions of the social security agreement are met, it may in some cases also be possible to avoid double payment of National Insurance contributions. Thus, instead of paying social charges in parallel in both countries, it may be possible to pay in only one country, subject of course to the specific circumstances and the proper arrangement.

This is an advantage that may be highly significant for employees, high-tech professionals, executives, consultants, and members of the liberal professions who wish to move to Israel while continuing to work under their current UK employer. For some of them, the relevant time window may create a real opportunity to move to Israel while significantly reducing their overall tax burden.

What Should Be Checked in Advance Before Immigrating from the UK to Israel?

Alongside the opportunity, it is important to examine several key points in advance. The first is the timing of the move to Israel, and whether it indeed falls within the relevant period for the benefit. The second is the level of employment income, and in particular whether it falls within the relevant exemption caps for the applicable year.

The third is tax residency status in the UK after the move to Israel. In cross-border moves, the question of residency may have far broader significance than the question of whether a specific benefit exists. In addition, the nature of the employment arrangement should be examined: is this continued employment with a UK employer, a move to an Israeli employer, or the provision of services as an independent contractor?

It is also important to examine the applicability of the social security agreement to the specific employment structure, especially where the employee remains employed by a UK employer. Beyond that, the practical aspects of obtaining any required approvals from the authorities should also be reviewed. Sometimes it is precisely the operational stage, involving documents, approvals, and aligning the employment structure with reality, that determines whether the benefits can actually be realized.

Illustrative Example: A UK Employee Who Immigrates to Israel in 2026 and Continues Working Remotely

Assume a high-tech employee living in the UK wishes to immigrate to Israel in July 2026 while continuing to work for their existing UK employer. For illustration purposes only, assume that their annual income is 580,000 NIS. If the date of immigration falls within the relevant period, if the employee meets the eligibility conditions, and if the employment structure allows the social security arrangements to apply appropriately, they may be able to enjoy an exemption from Israeli income tax on their employment income, since the income falls within the 600,000 NIS cap for 2026. If, in addition, the conditions of the agreement are also met, they may be able to avoid double social payments and pay only in one country.

By contrast, if that same employee were to immigrate after the end of 2026, or if their income were significantly higher than the relevant exemption cap, or if the employment structure were to change materially, the result could be different. Therefore, even when the headline appears very favorable, each case should be examined on its own merits.

For potential immigrants from the UK, 2026 may create a significant tax opportunity, especially where the move to Israel takes place while continuing to work for a UK employer. The combination of an Israeli income tax exemption on employment income, subject to the caps and conditions, together with the possibility of avoiding double social payments under the agreement with the UK, may make the transition period much smoother and more efficient.

That said, the actual outcome depends on the details. The timing of immigration, the level of income, the employment structure, tax residency, the applicability of the agreement, and the supporting documentation – all of these must be considered together. Those who prepare in advance, review the full picture, and do not rely solely on the general headline will be able to make better decisions and build their move to Israel on a proper and stable foundation.

Nimrod Yaron & Co. specializes in Israeli and international taxation. Our team includes professionals with years of experience at the Israel Tax Authority, as well as experience at leading firms and law offices, bringing together legal and economic perspective. We advise private and public companies, Israeli and foreign companies, global venture capital funds, as well as clients seeking focused advice in clear and practical language. We also work with a professional network of accounting firms and law offices around the world in order to provide a full-service solution in cross-border matters.

If you are considering immigration from the UK to Israel and want to understand in advance how to structure your employment arrangement, reporting, and tax planning correctly, it is advisable to carry out a legal and tax review before making binding decisions. An early review can help map the available benefits, adapt the employment structure to the circumstances of the case, and reduce uncertainty during the early stages of the move.

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