Leaving the UK? The Critical 18-Month Tax Playbook Every Future Expat Needs

Understanding Your Exit: Why The 6–18 Month Window Matters

Unlike what many people think, UK tax isn’t determined on the date you leave.
It’s governed by:

• the tax year
• your day counts
• your ties
• your working pattern
• the Statutory Residence Test
• assets you sell in the year before departure
• income you trigger before departure
• what you intend
• and what you can prove

If you leave in January…
your UK tax year runs until April.
If you leave in July…
your UK tax year runs until the following April.
If you leave in April…
your UK split-year can work well.
If you leave in March…
your planning window is almost zero.

The truth nobody tells future expats:

There’s rarely such a thing as “leaving the UK in the middle of the year” without planning. Your position is determined by the tax year, the Statutory Residence Test, and (where relevant) whether split-year treatment applies.

Residency: The First Battle You Need To Win

The Statutory Residence Test (SRT) decides if you are:

• UK resident
  or
• Non-resident

This is the foundation of most UK tax outcomes that follow.

Your residency determines:

• Whether split-year applies
• What UK tax you owe on foreign income
• Whether your employment income is UK taxable
• Whether UK property gains affect you
• Whether you’re taxed on worldwide income
• Whether HMRC can assess you globally
• Whether UK capital gains rules apply (and which assets remain in scope)
• Whether UK National Insurance continues or can be paid voluntarily
• How UK pensions and overseas pensions are taxed
• Whether future IHT exposure starts
• Whether offshore structures become taxable

The biggest mistake:

Believing residency is “where you spend most of your time”.

It is not.

Residency is a mathematical test based on:

• UK ties
• Day counts
• Past behaviour
• UK accommodation
• Family
• Workdays
• Your country tie

You can accidentally remain UK resident while living abroad if:

• Your family stays behind
• You keep a UK home
• You continue UK work
• You come back too often
• You fail the overseas work test
• You mismanage days

This is why you need the 6–18 month runway.

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Split-Year Treatment: Not As Automatic As You Think

Split-year treatment can divide the year into a UK part and an overseas part - but crucially, it only applies in specific cases and only where you’re UK resident under the SRT for that tax year.

But it applies ONLY if you meet strict, specific conditions.

Many expats assume they qualify.
In practice, eligibility is narrower than people expect.

Split year treatment can be lost if:

• You keep a UK home that is “available”
• Your overseas job ends
• You return to the UK sooner than expected
• You visit more frequently than allowed
• You cannot prove your centre of life moved
• Your travel pattern contradicts your intention

If split-year treatment is not available, you are treated as UK resident for the entire tax year, meaning:
UK tax can apply to worldwide income and gains, subject to specific exemptions and reliefs
Overseas employment income may still fall within UK tax depending on duties and timing.

This is why timing is everything.

The 18-Month Window: What To Do And When

Not everyone needs 18 months.
Some need 6.
Some need 12.
Some need the full 18.

It depends on:

• your job
• your bonus cycle
• shares/RSUs
• property ownership
• investment gains
• business ownership
• NI position
• pensions
• IHT exposure
• family situation

Below is a planning roadmap, with timing that varies by personal circumstances.

18–12 Months Before Departure: Foundations

1. Establish the date you want to become non-resident

It sounds obvious, but it isn’t.

Most people move out of the UK…
but don’t move out of UK residency.

You need to plan:

• day counts
• working pattern abroad
• ties you should reduce
• ties you should cut fully
• the moment you become “available home free”

2. Secure the Overseas Work Position (if relevant)

One of the strongest ways to establish non-residence.
But extremely easy to break.

3. Plan your UK property strategy

Do you:

• keep it?
• sell it?
• rent it?
• transfer ownership?
• change mortgage?

Every choice has tax consequences.

4. Build your investment strategy with exit in mind

This is when you:

• crystallise gains where needed
• reduce UK-exposed funds
• consider switching to expat-appropriate structures
• ensure you don’t enter the new tax year in the wrong wrapper

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12–6 Months Before Departure: High-Value Decisions

1. Bonuses, RSUs and compensation

Bonuses and equity awards are where people may be subject to unintended tax consequences - because UK tax is usually driven by when the entitlement arises/vests and what duties the award relates to, not simply when cash hits your bank account.
If a bonus/award is linked to UK workdays, a UK tax charge can still arise even if it’s paid after you leave.
RSUs commonly create a UK income tax exposure at vesting, with the UK element typically linked to the proportion of UK duties during the relevant period (not the payment date).

Timing advice is often needed months in advance.

2. Selling UK assets

For CGT purposes, the timing of a disposal is critical.

If you sell BEFORE leaving:
typically taxable.

If you sell AFTER becoming non-resident:
the UK tax outcome depends on the type of asset - for example, UK residential property and certain business assets can remain within UK CGT.

3. Offshore fund cleansing

Mixed funds can become a huge problem once you’re mobile. Get account hygiene right early - separate “clean capital” from income/gains where possible and avoid creating tracing issues you’ll regret later.
Not after you leave.
And never after you return.

4. Pension contributions

These interact with:

• earning levels
• higher-rate relief
• carry-forward
• overseas employment
• future drawdown
• DTA rules
• access age
• returning to the UK

Timing can save thousands.

5. National Insurance

With Class 2 NICs removed for expats and Class 3 restricted:

Leaving without a plan can reduce the likelihood of securing a full UK State Pension.

Final 6 Months Before Departure: Execution

This is when your tax residency strategy typically crystallises.

1. Reduce UK ties

• Sell the UK home or clearly evidence when it ceases to be available to you
• Move family abroad (if relevant)
• Ensure work patterns don’t contradict your exit
• Reduce UK visits
• Remove UK workdays
• Cancel UK memberships

2. Document intention

HMRC generally requires evidence, not just statements of intention.
They need:

• employment contract
• rental contract abroad
• home disposal
• family movement
• habitual residence pattern
• visa, residency, immigration paperwork
• shipping receipts
• airline records
• address changes

3. Confirm split-year eligibility

If your circumstances have shifted, you may fall out of the category without realising.

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Leaving The UK: The Critical Moment

The tax year is key.

Leaving on:

• Late March / early April → often the cleanest from a planning perspective, but still fact-dependent
• April–July → workable
• August–December → riskier
• January–March → higher risk for residency challenges and full-year UK taxation, depending on facts

You should start the overseas part of the split-year correctly:

• new home
• new job
• new centre of life
• reduced UK ties

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After You Arrive Abroad

The early months abroad often shape HMRC’s view of where your centre of life has genuinely moved, based on facts and behaviour rather than a fixed time rule.

• fly back too often
• work in the UK
• use a UK home
• keep UK economic ties
• receive taxable events
• don’t settle properly

HMRC may challenge your exit.

Upcoming Tax Rate Increases: Why Timing Matters Before Departure

· From 6 April 2026: Dividend tax rates rise by 2 percentage points (ordinary and upper rates).

· From 6 April 2027: Savings income and property income rates rise by 2 percentage points across bands.

If these income events land while you’re still UK resident (or you lose split-year), you can pay significantly more - which is why timing still matters.

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The End Of The Non-Dom Regime: Why It Matters For Brits Leaving Now

Even if you’re not a non-dom, the new rules affect you because:

• for IHT, long-term UK residence can bring worldwide assets into scope (broadly once you’ve been UK resident for 10 of the last 20 tax years).
• leaving the UK doesn’t necessarily “switch IHT off” immediately - there can be an IHT “tail” depending on how long you were UK resident.
• trusts are changing
• offshore structures face new transparency
• historic cleansing rules no longer apply
• remittance basis disappears

If you’re planning to leave the UK long-term, it’s important to consider how long-term life decisions interact with future IHT exposure.

Common Mistakes

• Leaving it too late
• Not planning employment income
• Keeping a UK home available
• Flying back too often
• Not heatmapping ties
• Wrong month of departure
• Not cleansing funds
• RSUs vesting at the wrong time
• Taking dividends while still UK resident
• Not planning NI
• Not planning IHT
• Not updating documentation
• Not setting up new residence properly

Step-By-Step Checklist

‍6–18 months before leaving:

• Define departure date
• Review property
• Review investments
• Plan RSUs and bonuses
• Check CGT position
• Document residency history and long-term intentions (relevant for future IHT and return planning)
• Prepare NI strategy
• Review offshore funds and account structures

6–3 months before leaving:

• Secure employment abroad
• Sign international contracts
• Reduce UK ties
• Confirm split-year category
• Prepare evidence
• Move family (if relevant)

Final 3 months:

• Freeze UK workdays
• Freeze UK meetings
• Reduce visits
• Move assets if needed
• Trigger disposals carefully
• Prepare financial documents
• Close UK facilities if needed

Departure month:

• Execute move
• Document everything
• Start overseas life
• Avoid UK work
• Avoid UK home use

Future Risks For British Expats

• Heightened HMRC scrutiny
• Enforcement of new residence-based IHT
• More global transparency
• NI tightening
• Income on assets taxed more
• Potential future changes to CGT rules
• Trust regime changes

Conclusion

Leaving the UK isn’t a tax decision you handle after the move.

It is a strategic window - 6 to 18 months - where many decisions shape:

• your income
• your assets
• your CGT
• your pensions
• your state pension
• your future UK liability
• your IHT exposure
• and the choices your family inherits

Most expats make these decisions in a rush.
They react.
They hope for the best.
And they pay for it later.

But with the right timing, the right structure and the right advice, leaving the UK can become a well-structured, documented and tax-efficient transition, with fewer future surprises.

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