The UK has no general exit tax on individuals, and Budget 2026, delivered on 28 October 2026, left that unchanged. Leaving still has a price: gains on assets you owned before departure come back into charge if you return within 5 years, UK property stays taxable, and inheritance tax follows long-term residents for up to 10 years.
Does the UK have an exit tax?
For individuals, no: the UK charges nothing on unrealised gains when a person stops being UK resident. HMRC's Overview of Tax Legislation and Rates for Budget 2026, published 28 October 2026, contains one exit-charge measure, at paragraph 1.28, and it concerns trusts. From 28 October 2026 no charge arises when a trust becomes UK resident only because a trustee moved here and it leaves again that year or the next.
Companies already pay on migration: section 185 of the Taxation of Chargeable Gains Act 1992 treats every asset as sold at market value immediately before a company ceases to be UK resident. Five European countries tax departing individuals, as our note on exit taxes in the Netherlands, Germany, France, Belgium and Spain sets out.
What is the temporary non-residence rule?
It is the closest thing the UK has to an exit tax, and it works by delay. Section 10A TCGA 1992 takes gains realised while you were abroad and taxes them in the tax year you resume UK residence. HMRC's helpsheet HS278, updated 6 April 2026, sets three conditions:
- Sole UK residence for all or part of at least 4 of the 7 tax years before the year of departure.
- A period without sole UK residence falling between two periods of sole UK residence.
- That period lasting 5 years or less in total.
HMRC's RDR3 notes, updated 11 June 2026, put the boundary at 5 years plus one day. A year in which a treaty makes you resident elsewhere counts as non-residence for this test. Whether you count as resident at all is the statutory residence test.
Which gains and income come back into charge?
Gains on assets you owned before you left come back into charge. Assets bought and sold within the absence are normally excluded, though HS278 keeps in assets received under no gain no loss rules, rolled-over gains and gains deferred from a pre-departure asset.
Some income returns to charge too: flexible drawdown pension withdrawals, close company distributions to material participators (except dividends out of trade profits earned during the absence), chargeable event gains on life policies and offshore income gains.
How much tax is due on return?
The full gain, taxed at the rate of the year you come back. An illustration with the 2026 to 2027 figures from GOV.UK: a higher rate taxpayer leaves in May 2023 after 12 years of sole UK residence, sells shares bought in 2018 for a £400,000 gain in 2024, and resumes UK residence in October 2026.
- Gain treated as accruing in 2026 to 2027 · £400,000
- Less the annual exempt amount · £3,000
- Taxable gain · £397,000
- Capital gains tax at 24% · £95,280
Had the absence lasted beyond 5 years, that sale would have carried no UK charge. Where the other country taxed the same gain, HS278 points to double taxation relief under helpsheet HS263.
Which UK taxes continue after you leave?
UK land and property remain taxable from day one. Non-residents pay capital gains tax on direct and indirect disposals of UK property or land, and HMRC's guidance, last updated 13 January 2026, requires a report through the Capital Gains Tax on UK property account within 60 days of completion, including disposals at a loss. An indirect disposal means a stake of at least 25% in an entity that draws 75% or more of its value from UK land.
UK income such as rent stays taxable. Rates for UK residents sit in our United Kingdom tax guide.
Does inheritance tax follow you abroad?
Yes, for up to 10 tax years. Since 6 April 2025 inheritance tax on worldwide assets turns on long-term UK residence: UK tax residence in each of the previous 10 years, or in 10 of the previous 20. HMRC sets the tail by length of residence:
- 10 to 13 years of UK residence · long-term status ends 3 years after leaving
- 14 years · ends 4 years after leaving
- 15 years · ends 5 years after leaving
- Resident throughout the previous 20 years · up to 10 tax years
- Deemed domicile on 30 October 2024 and non-resident in 2025 to 2026 · ends after 3 years
Ten consecutive years abroad reset the count. The transition from domicile is in our note on what replaced UK non-dom status.
How do you tell HMRC you are leaving?
Through the return you already file. Self Assessment filers complete the residence pages, form SA109, and must send that return by post, so the 31 October paper deadline applies. Everyone else uses form P85 to claim back tax on UK employment.
Split year treatment fixes the day non-residence starts. HMRC's manual at RFIG21000 lists three departure cases: full-time work overseas (Case 1), the partner of such a worker (Case 2), and ceasing to have a UK home (Case 3). Case 3 requires fewer than 16 days in the UK for the rest of the year and residence, presence or your only home in the new country within 6 months.
Heed's reading: the UK taxes departure through time limits. Gains on pre-departure assets stay exposed until the absence passes 5 years, and worldwide inheritance tax exposure can run for 10.
Heed monitors international tax law changes across every jurisdiction we track and sends personalised alerts before they affect your situation. More on how departure rules compare is on our exit tax page.