More UK-based private clients are exploring life overseas, often with attractive tax advantages as the main drive. But a successful move takes more than a flight and a forwarding address. Instead, it’s a multi-dimensional project involving legal, tax, financial, family and lifestyle considerations, and requires careful planning, ideally months in advance.
Know your residence status: Statutory Residence Test
Your UK tax position hinges on the Statutory Residence Test (SRT). The rules-based SRT determines an individual’s day counts and “ties” to the UK (such as UK accommodation, work, and family connections) to determine their UK tax residence status for a tax year.
Work with your advisers to assess your UK tax residence position, which may involve potentially reviewing the past ten tax years and projecting forward. Depending on the circumstances, you may qualify for “split year treatment” which could mean you’re treated as UK resident for only part of the year you leave.
Top tips:
- Track the days you spend in the UK meticulously. Keep boarding passes, calendar entries, and geolocation logs. A single day can tip the balance. Broadly speaking, a day counts if you stay until midnight.
- Watch your ties, not just your days. Reducing the number of UK ties you have (for instance, giving up a UK home or limiting the days you work in the UK) can be just as important.
Long-term residence: A misnomer
From 6 April 2025, UK tax rules for internationally mobile individuals have changed. A new concept of long-term residence now affects an individual’s liability to inheritance tax and it’s not as straightforward as it sounds.
Simply becoming non-UK resident doesn’t eliminate your UK inheritance tax exposure and you could be treated as a long-term UK resident for inheritance tax purposes even after a decade abroad. You may, therefore, wish to explore alternative estate planning and tax mitigation techniques, such as using a double tax treaty, tax-efficient investments or life insurance.
UK assets and ongoing exposure
Even as a non-resident, you may still be taxed in the UK on UK-source income (eg rent, employment) and UK property gains. Consider using the Non-Resident Landlord Scheme, and clarify payroll issues if you maintain UK work connections.
Take advice in your destination before arrival
Your new country may impose tax from day one. Speak to a local advisor early to understand:
- Residency thresholds and visas: What actions trigger tax residence?
- Pre-arrival planning windows: Some regimes offer favourable treatment for new arrivals, but only if you organise your affairs appropriately before landing.
- Wealth structures: Trusts, foundations, holding companies and insurance wrappers may be taxed very differently abroad. Ensure your UK structures won’t create punitive outcomes locally.
Property, schools and lifestyle
A tax-efficient plan must also work for your life:
- Housing and schools: Lead times for top schools can be long. Availability may determine your landing date and your UK tax residence at the relevant time.
- Healthcare and insurance: Understand local healthcare access, private cover needs, and continuity of existing policies.
- Cost of living and cash management: Banking access, currency and capital mobility all matter.
Beware of “temporary non-residence” traps
Some UK rules claw back tax advantages if you become non-resident and then return within a defined period. These anti-avoidance provisions can turn sensible planning into an unexpected tax bill. If there’s any chance you’ll return to the UK within five years, structure with that possibility in mind.
Double tax treaties
If you’re considered a resident or have assets in two countries, a double tax treaty may apply. Your tax adviser can help you understand which country has taxing rights and how to ensure you can claim maximum tax credit.
Estate planning: Wills, forced heirship and local taxes
Many civil law countries impose forced heirship rules which dictates who inherits and in what shares, regardless of what your UK will may say. You may need a local will, carefully coordinated with your UK one to avoid accidental revocation. Ask about local inheritance and gift taxes, and how they interact with your UK tax exposure. Consider any relevant powers of attorney that you may need.
Final thoughts
Successful exits are planned, documented and coordinated. Get UK advice on your SRT position, long-term residence status, and the suitability of your current structures and estate plan. Crucially, get destination advice before arrival. Align family logistics, refresh your wills, check for forced heirship issues and local taxes. And above all, retain flexibility. Life changes and you may want to leave the door open for a return to the UK.
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