The United Kingdom has no general exit tax. Leave, become non-resident, sell your company from abroad and the gain is — subject to some significant exceptions — outside the UK net. That comparative generosity is why the two rules that do operate matter so much: the temporary non-residence rules for individuals, and the deemed disposal that hits companies migrating their tax residence out of the UK.
Individuals: the five-year rule
An individual who becomes non-resident and disposes of assets is generally outside UK capital gains tax on those gains — with the major exception of UK land and property, which has been within the charge for non-residents since 2015 and 2019 and requires a 60-day return whatever the outcome.
The counterweight is the temporary non-residence rule. Where someone was UK resident in at least four of the seven tax years before departure, and returns to the UK within a period of five years or less of non-residence, gains realised during the absence on assets held before departure are taxed in the year of return. The same principle applies to certain income — notably close company distributions, remitted foreign income and pension lump sums.
The effect is that leaving for a couple of years to realise a gain does not work. Leaving permanently does, and the difference between the two is measured by the calendar and by the statutory residence test rather than by intention. Anyone planning around this needs to be certain about the year of departure, whether split-year treatment applies, and what the day counts will be for the whole period — because returning in year five undoes everything.
Companies: migration is a disposal
For companies the position is stricter. A company that ceases to be UK resident is treated as having disposed of and immediately reacquired its assets at market value at that moment, crystallising the unrealised gains as a single charge — the exit charge proper.
Assets that remain within the charge to UK corporation tax through a UK permanent establishment are excluded, which is the main planning route: leaving the appreciating assets behind in a UK branch or subsidiary rather than moving them with the residence. Where a charge does arise, an exit charge payment plan can spread it over instalments rather than requiring payment in one sum.
Migration is also not achieved simply by moving directors abroad. Residence follows incorporation and central management and control, and a company incorporated in the UK is UK resident regardless of where its board meets — subject to treaty tie-breakers where another country also claims residence. Which means an unintentional migration is rare for a UK-incorporated company and entirely possible for a foreign-incorporated one whose directors have quietly relocated to London, in the opposite direction.
What travels with you and what does not
Three assets behave differently from the general rule and account for most of the surprises:
- UK land and property — taxable on disposal by non-residents, directly or through interests in property-rich entities where at least 75% of the value derives from UK land and a 25% interest is held;
- Assets used in a UK trade through a branch or agency, which remain within the charge;
- Employment-related securities. Options and share awards earned while UK resident retain a UK connection, apportioned by reference to the period of UK duties — so a founder who leaves before exercising is frequently still taxable here on part of the gain, which is the single most common surprise in an international exit.
Inheritance tax follows its own logic entirely, now keyed to long-term residence rather than domicile, and a departure that solves income and gains does not necessarily solve estate exposure for years afterwards.
The practical sequence
Departure planning that works starts at least a full tax year before the move. Establish the intended date and whether split-year treatment will apply. Model the day counts and ties for the years of absence, including the temporary non-residence window, and be honest about whether a return within five years is realistic — for most people with UK family it is. Deal with employment-related securities before departure rather than after. Check the destination country's own entry rules, since several impose their own arrival charges or tax gains the UK would not. And keep the evidence: travel records, accommodation, work patterns, and the ties the residence test measures.
Companies should take the same approach a year out, identifying which assets would crystallise, whether a permanent establishment solves it, and what the payment plan would look like if it does not.
Acumon advises on departure and arrival planning through international tax and expatriate tax work, with the residence analysis and the corporate migration questions handled together where a founder and their company are moving at the same time. If a return to the UK within five years is even possible, that is the assumption to plan against.