UK Exit Tax on the Horizon?

The UK government is reportedly weighing a major change to its capital gains tax regime: an Exit Charge, referred to in the press as a ‘settling-up charge’ that would apply to wealthy individuals who leave the UK and retain business assets such as shares.

According to speculation published in the press this weekend, the Treasury is exploring a 20% tax on unrealised gains for individuals who emigrate and hold valuable UK-based assets. This would bring the UK in line with other G7 countries that already impose exit taxes on departing residents.

What’s Being Proposed?

Currently, individuals can leave the UK and sell certain UK assets, such as shares in private companies, without incurring UK capital gains tax, provided they remain non-resident for at least five years. However, under the proposed reforms:

• A 20% CGT-style charge would apply to business assets at the point of departure.
  
  
• The tax would be based on unrealised gains - even if the assets are not sold.
  
  
• Individuals could defer payment for several years if they do not wish to liquidate immediately.
  
  
• The policy may be paired with a relief for pre-arrival gains, creating a more balanced system for inbound and outbound taxpayers.
  
  

Why It Matters

This change could have significant implications for high-net-worth individuals considering a move abroad.

The Treasury estimates the measure could raise £2 billion, and it’s being positioned as a way to ensure fairness in the tax system.

What You Can Do Now

If you’re concerned by the impact of these proposals and were already considering relocating abroad, or are already in the process of doing so, time may be of the essence. With the Autumn Budget scheduled for 23 November, there may still be a window of opportunity to leave the UK and establish non-residence before any new rules are introduced.

At our firm, we specialise in tax planning internationally mobile individuals. We can help you:

• Assess your current UK tax residency status.
  
  
• Plan a compliant and tax-efficient departure from the UK.
  
  
• Structure your business and personal assets to mitigate exposure to future exit taxes.
  
  
• Navigate the temporary non-residence rules and other anti-avoidance provisions.
  
  

Final Thoughts

The Budget is on 23 November and we will not know if an Exit Tax will be introduced until then.  Whilst we in no way advocate making knee jerk decisions based on speculative press reports, we do have clients who have decided to leave the UK before Budget Day where they have particular concerns around the tax changes which may, or may not be introduced.

Please contact us using the form below if you would like further advice on this matter.

As the year-end approaches, review your finances and optimise your tax strategy. Download the UK Year End Tax Planning Guide 2025-26 here to ensure you're making the most of available allowances and reliefs.