As of October 2026, the UK does not have a general exit tax for individuals. When you stop being UK tax resident, HMRC does not treat you as having sold your shares, funds or other assets on the day you leave. Countries such as the US, Canada, Australia, France and Germany do have that kind of charge.
That does not mean leaving is tax-neutral. The UK has a set of rules that follow people abroad: a five-year rule that taxes some gains and income if you come back too soon, capital gains tax on UK property for non-residents, and, since April 2025, an inheritance tax "tail" for long-term residents. The idea of a full exit tax also keeps coming back in policy debates.
Key takeaways
- There is no deemed disposal on departure for individuals in the UK as of October 2026, and the November 2025 Budget did not introduce one.
- If you return within five years, gains made while abroad can be taxed in the year you come back, under the temporary non-residence rules.
- Non-residents pay capital gains tax on UK land and property, and must report residential sales within 60 days.
- Long-term UK residents stay within inheritance tax on worldwide assets for three to ten years after leaving.
- A think tank proposal for a "deemed disposal on departure" exists, but it is a proposal, not law.
The short answer: no deemed disposal on departure
An exit tax, in the usual sense, charges tax on gains that have built up but not been realized when a person stops being resident. Our list of countries with exit taxes shows how common it is. The UK has such a charge for companies that move abroad, but not for individuals.
The gap has drawn attention. In October 2024, the Centre for the Analysis of Taxation (CenTax) published research on business owners who emigrate. It estimated that the UK loses at least £500 million a year in capital gains tax and recommended a "deemed disposal on departure", adding that the government could afford to exempt people with gains below £1 million. It noted that, within the G7, only the UK and Italy charge no capital gains tax on emigrants.
An exit charge was among the ideas discussed in the run-up to the November 2025 Budget, but the Budget documents published on 26 November 2025 did not include a general exit charge. Any future exit tax would need legislation in a Finance Bill, and the design (rate, threshold, deferral, start date) would matter a great deal. Until then, reports about it are speculation or proposals.
Temporary non-residence: the five-year rule
The most important rule for people who leave and might return is temporary non-residence. HMRC guidance at CG26540 sets out when it applies:
- You had sole UK residence for at least four of the seven tax years before the year you left.
- Your period of non-residence is five years or less.
If both are true, gains you realized while abroad on assets you owned before you left are treated as arising in the tax year you return. In other words, you cannot leave for a year or two, sell a business or a share portfolio tax-free, and come straight back. Some types of income received while abroad, such as certain pension lump sums and dividends from close companies, are caught in the same way.
The Budget in November 2025 tightened this further. From 6 April 2026, the government said it would remove the "post-departure trade profits" carve-out, so that dividends and distributions received from close companies during a period of temporary non-residence all become chargeable on return.
For people who stay away for more than five full years, the rule falls away. That is why the timing of a departure and any return matters so much, and why many people keep careful records of their UK days. A day counter or a simple log helps, and our guide to tracking days for tax residency explains what to record.
UK property stays in the UK tax net
Non-residents have paid capital gains tax on UK residential property since April 2015. Since 6 April 2019, the charge covers all UK land and property, including commercial property and indirect disposals of "property-rich" companies. According to HMRC's guidance for non-residents, you must report and pay on a UK residential property sale within 60 days of completion, even if no tax is due.
UK rental income also stays taxable in the UK after you leave, usually through the non-resident landlord scheme. A double tax treaty may give credit in your new country, but the UK keeps its right to tax UK land.
The inheritance tax tail after April 2025
From 6 April 2025, the UK replaced domicile with a residence-based system. Under the government's policy paper, a person who has been UK resident for at least 10 of the last 20 tax years is a long-term resident, and their worldwide estate is within inheritance tax.
When a long-term resident leaves, they stay in scope for between three and ten years, depending on how long they lived in the UK. This is not an exit tax on gains, but it is a real cost of leaving for people with large estates. It also means that a move made late in life may not change the inheritance tax position for several years. The broader effect of these reforms is covered in our article on the UK wealth exodus after the end of non-dom status.
When you actually stop being UK resident
All of the above depends on when your UK residence ends. That is decided by the statutory residence test, which combines day counts, ties and work patterns. Split-year treatment can make you non-resident from the day after you leave, but only if you meet one of the specific cases. Our guide to the statutory residence test walks through the tests.
HMRC expects to hear from you. If you do not file Self Assessment, you tell HMRC with form P85. If you do, you report the change on the residence pages (SA109) of your return. GOV.UK's page on leaving the UK lists both routes.
Your new country may also treat you as resident from the day you arrive. Where two countries both claim you for the same year, the treaty tie-breaker decides, as explained in our article on tax treaty tie-breaker rules.
Other things that change when you leave
Several smaller rules change on departure:
- ISAs: You can keep an ISA and its tax relief, but you cannot pay new money in while you are non-resident.
- Voluntary National Insurance: The November 2025 Budget announced that from 6 April 2026, people abroad can no longer pay cheaper Class 2 voluntary contributions, and new Class 3 applications from abroad need either 10 years of continuous UK residence or 10 qualifying years on the record.
- State Pension: It can be paid abroad, but annual increases depend on the country you live in.
- UK income: Employment duties performed in the UK, UK rent and some other UK income stay taxable here.
How the UK compares
| Country | General exit tax for individuals? | Main mechanism |
|---|---|---|
| United Kingdom | No | Temporary non-residence, property CGT, inheritance tax tail |
| United States | Yes, on giving up citizenship or a long-held green card | Mark-to-market for "covered expatriates" |
| Canada | Yes | Deemed disposition of most property on emigration |
| Australia | Yes | Deemed disposal of assets that are not Australian property |
| France | Yes, above thresholds | Tax on unrealized gains on securities, often deferred |
| Germany | Yes, for larger holdings | Tax on company shares of 1% or more |
Our overview of low-tax countries for UK citizens looks at where British movers often go and how those countries tax new residents.
Frequently asked questions
Does the UK charge capital gains tax when you emigrate?
Not on departure itself, as of October 2026. Gains on non-UK assets sold after you become non-resident are generally outside UK capital gains tax, unless the temporary non-residence rules apply because you return within five years.
What is the UK five-year rule for capital gains?
If you were solely UK resident for at least four of the seven tax years before leaving, and you return within five years, gains realized while abroad on assets held before departure are taxed in the year you return.
Is Rachel Reeves introducing an exit tax?
There has been speculation and a published think tank proposal, but no general exit tax for individuals was included in the November 2025 Budget. Until a measure appears in legislation, it remains a proposal.
Do I pay UK tax on UK property after moving abroad?
Yes. Non-residents pay capital gains tax on disposals of UK land and property, and UK rental income stays taxable in the UK. Residential sales must be reported within 60 days.
Do I still pay UK inheritance tax after I leave?
If you were a long-term UK resident (10 of the last 20 tax years), your worldwide estate stays within UK inheritance tax for three to ten years after you leave, depending on your residence history.
Important: This article is general information, not tax, legal or financial advice. Rules change often and depend on your personal circumstances. Speak with a qualified professional in each relevant country before you act.