As of early 2026, there is no direct, general "exit fee" or exit tax for individuals leaving the UK. While there has been speculation about potential taxes on assets for those departing, and rumors of a "£500 exit fee" have been confirmed as false, individuals must still manage tax residency changes with HMRC.
The proposed “exit tax” – also referred to as a “settling-up charge” – would impose a 20% levy on unrealised gains from UK business assets when an individual ceases to be UK tax resident. This would include shares in private companies and other financial instruments, even if they are not sold at the time of departure.
While the UK does not currently have an exit tax which applies to individuals ceasing to be UK tax resident, it does have regimes for trusts and companies that cease to be UK tax resident.
While there is no Exit Tax in the UK, a number of reliefs can be lost, either immediately or after a short period such as: Personal allowance for Income Tax if not covered by treaty or nationality.
The best way to “beat” the exit tax is to avoid becoming a Covered Expatriate in the first place. If you don't trigger any of the three tests (Net Worth, Tax Liability, or Compliance), you can leave the U.S. tax system without paying a “deemed sale” tax on your assets.
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. These rules (called 'temporary non-residence') apply if both: you return to the UK within 5 years of moving abroad (or 5 full tax years if you left the UK before 6 April 2013)
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.
You need to tell the relevant government offices that deal with your benefits, pension and tax that you're moving or retiring abroad.
While there is no direct tax charge on leaving the UK, we will consider the loss of certain tax reliefs and tax benefits that cease to be available when an individual stops being a UK tax resident under the statutory residence test, as defined in Finance Act 2013 Sch 45.
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. You may need to pay UK tax if you're non-resident and have UK income.
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).
50-Day Window to Avoid Exit Fees
Martin Lewis, the founder of MoneySavingExpert.com, has advised consumers that they can avoid early exit fees if they leave a fixed energy tariff within the last 50 days of their contract. This provides a window of opportunity to switch to a better deal without penalty.
Chancellor Rachel Reeves has reportedly been considering a 20% “exit tax” that would apply to high-net-worth individuals (HNWIs) leaving the UK. This tax would target unrealised gains on business and investment assets acquired while an individual was a UK resident.
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.
Tax Refund: If you've overpaid your taxes during the year, HMRC can issue a refund. The P85 helps them process this refund by updating your tax records. Correct Tax Code: It ensures that your tax code is adjusted appropriately before you leave, avoiding any issues with your tax calculations while abroad.
Going abroad temporarily
Tell the office that pays your benefit if you plan to go abroad for more than 4 weeks. You can claim the following benefits if you're going abroad for up to 13 weeks (or 26 weeks if it's for medical treatment): Attendance Allowance. Disability Living Allowance ( DLA ) for adults.
UK tests. You may be resident under the automatic UK tests if: you spent 183 or more days in the UK in the tax year. your only home was in the UK for 91 days or more in a row - and you visited or stayed in it for at least 30 days of the tax year.
In many cases, this fee is automatically included in your airfare, while some countries require you to pay at the airport before boarding. 🔍 How to Check if You Need to Pay a Departure Tax: 💡 Look at your airline ticket breakdown – if listed, it's already included.
If you earn between £100k-125k a year, the 60% tax trap could cost you thousands. This is because in the UK, as your earnings grow above £100,000, your personal allowance reduces, until eventually you pay tax on every penny you earn.
This depends on how long you'll be away. You don't have to do anything if you're only popping on holiday for two weeks, but you'll need to tell HMRC if you're: Leaving the UK to live abroad permanently. Planning to work overseas for at least a full year.
The exit tax applies to U.S. citizens and long-term green card holders with a net worth exceeding $2 million or an average annual tax liability over $171,000 during the last five years. Yes, you are still subject to U.S. tax. Your tax obligations end only after your file Form I-407, formally abandoning the Green Card.
Upon returning to the UK, it's essential to update your tax status with HMRC to reflect any changes in your tax obligations, especially if you have income from foreign sources.
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.