UK/Australia Tax Experts

Expat Tax Advice for Individuals Leaving UK

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Tax considerations for individuals relocating from the UK

Tax Residency Status

The first consideration is to determine if there is a change in your tax residency status once you have relocated overseas.

Individuals who are tax resident in the UK are subject to UK tax on their worldwide income and gains. However, once an individual ceases to be UK tax resident they are no longer subject to UK tax on their overseas income and, in certain circumstances, will not be liable to tax on their UK sourced income.

Whether or not a UK expat remains tax resident in the UK will depend on a number of factors including their movements and connections to the UK. It is important to remember that tax residency does not necessarily correspond with VISA or Citizenship status.

The UK has a rigorous test to determine an individual’s tax residency position called the Statutory Residence Test.

Income Tax

Individuals leaving the UK who are no longer UK tax resident will still remain subject to UK tax on certain UK sourced income. Their exposure to tax in the UK is based on the type of income received and whether the country the individual has relocated to, has a tax treaty with the UK.

Capital Gains Tax (CGT)

Once an individual ceases to be UK tax resident they are no longer subject to UK CGT on the disposal of their assets unless the disposal is of UK land and property, or shares in a company which derives at least 75% of its income from UK land and property.

For both UK and non-UK tax resident individuals, these disposals need to be reported to HMRC within 60 days of completion. The only exception to this is where the property has been used as the individual’s main residence throughout the whole period of ownership and the property meets certain conditions.

When a non-UK tax resident disposes of a UK property, they can elect to rebase the property for CGT purposes to its value as at 5 April 2015.

Individuals planning on relocating overseas should therefore seek professional tax advice prior to departing in respect of any assets they own. Pre-departure planning can ensure that the disposals of any assets are timed in the most tax efficient manner.

Inheritance Tax

An individual’s liability to UK IHT is dependent on their residence and domicile status. Where an individual has relocated overseas, their domicile for IHT purposes may remain in the UK if they have lived in the UK for 15 of the prior 20 tax years, or if they have had their permanent home in the UK in the last 3 years of their life.

In such cases, IHT will still be due on any UK assets owned by an individual.

IHT planning is a useful service for individuals wishing to mitigate their exposure to UK IHT both now and in the future.


The tax issues surrounding trusts are complex when dealing with non-residents and it is recommended that professional tax advice be obtained.

The residency of a trust will depend on the residency status of the trustees and the residence and domicile status of the Settlor at the time the trust was settled.

Non-resident trusts are not liable to UK tax on overseas income but a UK tax charge may arise where there is UK sourced income. In these cases, a trust will need to continue to file a UK tax return.

The IHT implications of a trust will depend on the Settlor’s domicile and the situs of any trust assets and so a trust may still be liable to IHT even if you relocate overseas. Depending on the assets within a trust, IHT may be due when assets are put into trust, when assets leave a trust, or at a 10 year anniversary of a trust.

Individuals should start planning well in advance of an overseas move to ensure there are no unintended tax consequences and there is sufficient time for tax planning.

Where individuals have already relocated, there will still be merit in seeking tax advice to ensure you remain fully compliant with any tax obligations and tax advantage of any tax planning opportunities available to you.

We can help provide advice in relation to this.

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