Leaving the UK: the tax rules that follow you

UK residence is decided each tax year (6 April to 5 April) by the Statutory Residence Test (SRT). It is mechanical, and it is applied in a fixed order: first the automatic overseas tests, then the automatic UK tests, then the sufficient ties test. The first test that gives an answer is the answer.

Without split-year treatment you are resident for the whole tax year you leave in, and taxed on your worldwide income and gains for all of it, including the months after you have gone. Split-year treatment cuts the year into a UK part and an overseas part. It is not a choice: it applies automatically if you fit one of the statutory cases, and not otherwise.

The UK does not tax a non-resident on most gains, which makes the obvious plan: leave, sell the company, come back. Temporary non-residence (TNR) is the rule that stops it. If you were solely UK resident in at least 4 of the 7 tax years before the year you leave, and you come back after a period of non-residence of five years or less, gains you realised while away on assets you already owned when you left are taxed as if they arose in the year you return.

Since 6 April 2025 inheritance tax no longer turns on domicile. It turns on long-term residence. If you have been UK resident in at least 10 of the last 20 tax years, you are a long-term resident and your worldwide estate is within UK IHT, at 40% above the available nil-rate bands, wherever you live when you die.

The remittance basis ended on 5 April 2025. There is no longer a way for a long-term UK resident to leave foreign income and gains offshore and pay no UK tax on them. Domicile has stopped mattering for income tax and CGT.

A company incorporated in the UK is UK tax resident, full stop, under UK law. Moving yourself abroad does not move your company. It keeps paying UK corporation tax on its worldwide profits, and dividends it pays you become UK-source income for a non-resident (generally with no further UK tax to pay, but check the new country's treatment).

UK property stays in the UK tax net. Rent from UK property is UK-source income, taxable whatever your residence. Under the Non-Resident Landlord scheme your letting agent, or your tenant if the rent is over £100 a week and there is no agent, must deduct basic-rate tax (20%) from the rent unless HMRC has approved you to receive it gross. Apply for approval before you leave and keep filing a Self Assessment return.

1. Before you set a date: model the tax year. Pick the departure date so that you fit a split-year case, check how long your IHT tail will be, and decide whether any sale or large dividend could fall inside a five-year TNR window.

The UK has no general exit tax for individuals. You are not treated as selling your shares the day you leave, and a genuinely non-resident individual is generally outside UK CGT on shares in a trading company. That is the good news, and it is why founders leave before a sale. The bad news is the list of rules that recover the tax anyway.