Individuals: Taxation on exit

Updated: Feb 2

4 November 2021


Does UK impose any tax when a person leaves (for example, an exit tax)? Are there any other consequences of leaving (particularly with regard to individuals domiciled in the UK)?


Generally, there are no taxes or exit charges if a person ceases to be an UK tax resident. However, there are some provisions that may trigger certain tax consequences if a person ceases to be a resident. For example,

  1. Clawbacks on hold-over Section 168(1) Taxation of Capital Gains Act 1992 (TCGA 1992) in case of emigration of a donee. Provided that certain requirements are met, if the transferee at a time when he has not disposed of the received asset ceases to be UK resident a chargeable gain deemed to have accrued to him as if he were an UK resident.

  2. Enterprise Investment Scheme (EIS) relief may not apply if an investor ceases to be UK resident (Schedule 5B TCGA 1992). Provided the requirements are met the relief still applies when though UK tax resident the individual is recognised as an UK non-resident for the purposes of the double tax agreement.

  3. Charges on emigration of a trust (Section 80 TCGA 1992). According to the provision a deemed disposal of trust assets is trigged as a consequence of the trustees becoming neither resident nor ordinarily resident in the UK.

  4. Income taxed as trade profits (Section 17 ITTOIA). The change of residence may cause the application of the section. According to the provision the individual is treated for income tax purposes as permanently ceasing to carry on the trade at the time of the change of residence, and as starting to carry on a new trade immediately afterwards. This does not prevent a loss made before the change of residence from being deducted from profits arising after the change.


For further information on any of the points above, please, contact

Yuliya Shved at: yuliya@lexefiscal.com or

Dr Clifford J Frank at: clifford.frank@lexefiscal.com

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