No, the UK does not currently have a broad exit tax on individuals leaving, but there's significant ongoing discussion and recent legislative changes (April 2026) tightening rules on temporary non-residents, particularly regarding close company distributions, and potential future moves toward a CGT exit charge are rumored, creating uncertainty for wealthy individuals. While there's no universal charge like in some other countries, specific income and gains might still be taxed upon return if you left for less than five years (a "re-entry" charge).
Air Passenger Duty (APD) is an excise duty which is charged on the carriage of passengers flying from a United Kingdom or Isle of Man airport on an aircraft that has an authorised take-off weight of more than 5.7 tonnes or more than twenty seats for passengers. It is a type of departure tax.
If you're non-resident, you do not pay UK tax on income or gains you get outside the UK. You may be non-resident the day after you leave the UK - this depends on your situation and how 'split year treatment' applies to you.
The U.S. exit tax is a final tax bill charged to certain U.S. citizens and long-term Green Card holders that treats their renunciation or status change as a 'deemed sale,' taxing the unrealized gains on their worldwide assets as if they were sold for fair market value the day before they left.
You may have to pay tax when you sell (or 'dispose of') your UK home if you're not UK resident for tax purposes. Even if you have no tax to pay, you must tell HMRC you've sold the property within 60 days of transferring ownership (conveyancing).
To avoid the UK's 60% tax trap (an effective 60% rate on income between £100k-£125k), the key is to reduce your adjusted net income back below £100,000 by making tax-efficient contributions, primarily via pension contributions, which reclaim your full £12,570 Personal Allowance, and also through salary sacrifice for benefits like childcare or cycle-to-work, and Gift Aid donations to charity.
It allowed sellers to claim CGT exemption for the final 36 months of ownership, even if they had moved out. However, this was reduced to 18 months in 2014 and further to 9 months in 2020, which remains the rule today. This general law is in place as it prevents short-term transaction benefits concerning taxation.
Key Ways to Avoid Exit Tax
Whilst the introduction of an exit tax remains speculative, given ongoing fiscal pressures and policy trends it remains credible. Even if an exit tax is not introduced, it is likely there will be further tax increases that will hit business owners, which have been explored in our other Budget prediction articles.
You can live abroad and still be a UK resident for tax, for example if you visit the UK for more than 183 days in a tax year. Pay tax on your income and profits from selling assets (such as shares) in the normal way. You usually have to pay tax on your income from outside the UK as well.
Even if your net worth is under $2 million, you may still owe an exit tax if your average annual net income tax liability for the five years before expatriation exceeds a set threshold. For 2025, the threshold is $206,000 (adjusted annually for inflation).
The UK imposes a tax on all departing passengers called Air Passenger Duty and the higher your cabin of travel is, the more you'll pay for the APD tax. Since there is no way to not pay the tax when flying out of the UK, you should always depart the UK on a short-haul Economy Class flight to pay a much lower APD.
How UK's Proposed 20% Exit Tax Will Impact Individuals and Businesses. Chancellor Rachel Reeves has reportedly been considering a 20% “exit tax” that would apply to high-net-worth individuals (HNWIs) leaving the UK.
You need to tell HM Revenue and Customs ( HMRC ) that you're moving or retiring abroad to make sure you pay the right amount of tax.
Yes, you can give your daughter $100,000 to buy a house, but you'll need proper documentation for her mortgage lender and you'll likely need to file a gift tax return (IRS Form 709) because the amount exceeds the annual exclusion, though it won't usually result in taxes unless you've used up your large lifetime exemption. Lenders require gift letters proving the funds aren't a loan, and you can avoid gift tax impact by gifting up to the annual limit ($19,000 per person in 2025) each year or by using your substantial lifetime exemption.
Yes, you can give your son $100,000 tax-free in 2025 by utilizing the annual gift tax exclusion and your lifetime exemption, but you'll need to report the gift to the IRS on Form 709 since it exceeds the $19,000 annual limit, though you won't pay tax unless you exceed your much larger $13.99 million lifetime gift/estate tax exemption. The gift is considered yours (the giver) for tax purposes, not your son's.
Holding a green card for 8+ years may trigger exit tax liability. You must formally file Form I-407 to abandon your green card. Proper timing and compliance can help you avoid covered expatriate status. Strategies like consolidating accounts and avoiding PFICs can ease the tax burden.
If you use your former home to produce income (for example, you rent it out or make it available for rent), you can choose to treat it as your main residence for up to 6 years after you stop living in it. This is sometimes called the '6-year rule'. You can choose when to stop the period covered by your choice.
If you return to the UK within 5 years
You may have to pay tax on certain income or gains made while you were non-resident. This doesn't include wages or other employment income.