Leaving the UK involves more than choosing a destination
Moving overseas is often described in terms of where you are going.
But an international relocation also involves decisions about what happens to your position in the UK.
Your tax residence, property, employment, business interests, investments, pensions, banking arrangements and continuing connections with the UK may all need to be considered before you leave.
Knightsbridge helps individuals, families, professionals and business owners identify the issues that may arise when leaving the UK and coordinate the appropriate advice around the wider relocation.
The objective is to make sure the departure from the UK is planned with the same care as the move overseas.
When do you actually leave the UK for tax purposes?
Moving abroad does not automatically mean that you immediately stop being UK tax resident. Your position may depend on a combination of factors, including:
- how many days you continue to spend in the UK;
- whether you continue working here;
- whether accommodation remains available to you;
- where your family lives;
- your previous residence history; and
- the connections you retain with the UK.
The timing of departure can therefore matter. A difference of weeks or months may affect the tax position for a particular year.
Where tax is relevant, it is often better to understand the residence position before finalising the move.
What happens to your UK home?
Property is one of the most common issues when leaving the UK. You may be considering whether to:
- sell your home;
- retain it;
- rent it out;
- leave it available for occasional use;
- allow family members to remain there; or
- maintain a UK property alongside a home overseas.
Each option can have different tax, financial and practical consequences. For example, retaining a UK property may affect your continuing connections with the UK and can create ongoing tax and reporting obligations.
Selling may raise capital gains considerations depending on the circumstances and timing. The property decision should therefore be considered as part of the wider relocation.
UK income after you leave
You may continue to receive income from the UK after moving abroad.
This could include:
- rental income;
- salary;
- director’s remuneration;
- dividends;
- pension income;
- investment income;
- business profits; or
- other UK-source income.
Leaving the UK does not necessarily remove that income from UK taxation. The position can also depend on the tax rules of the country you move to and whether a double taxation agreement applies.
Employment and business interests
Leaving the UK can be more complex where you remain connected to a UK business.
You may be:
- employed by a UK company;
- a director;
- a shareholder;
- self-employed;
- a business owner;
- receiving dividends; or
- continuing to manage a business from overseas.
Your personal move does not necessarily change the tax or legal position of the business.
For directors, founders and shareholders, it may also be necessary to consider where the company is managed, how remuneration is structured and whether any overseas entity or employment arrangement is required.
Investments and financial accounts
International relocation can affect existing financial arrangements. Depending on the provider and destination, you may need to consider:
- whether existing bank accounts can remain open;
- whether investment accounts can continue to be used;
- future contributions to ISAs;
- pension arrangements;
- investment platforms;
- overseas banking;
- currency exposure; and
- international transfers.
Some providers impose restrictions once a customer becomes resident in another country. It can therefore be useful to review these arrangements before your address and residence change.
Pensions
Pensions can remain an important part of your financial position after leaving the UK.
Questions may arise around:
- continuing contributions;
- access to pension income;
- taxation of withdrawals;
- currency;
- overseas residence;
- pension transfers; and
- longer-term retirement planning.
Where regulated pension or investment advice is required, this should be provided by an appropriately authorised adviser.
Healthcare and insurance
Moving overseas can also affect access to healthcare and insurance. Depending on the destination and your status, you may need to consider:
- private medical insurance;
- local healthcare registration;
- employer-provided healthcare;
- travel insurance;
- life insurance; and
- whether existing UK policies remain valid.
These practical arrangements can become especially important for families or individuals with ongoing medical or insurance needs.
Banking and moving money overseas
International relocation may involve moving substantial sums between countries.
This can arise through:
- property purchases;
- business investment;
- savings;
- relocation costs;
- salary;
- pension income; or
- investment transfers.
Banks and professional advisers may require evidence of the source of funds or source of wealth. International transfers can also involve exchange-rate costs and different banking requirements. Where significant amounts are involved, these arrangements should ideally be considered before the funds need to move.
Your UK immigration position
For British citizens, leaving the UK does not affect the right to return and live in the UK. For people holding another form of UK immigration status, however, extended periods overseas can sometimes affect that position.
This can be particularly important for individuals holding:
- indefinite leave to remain;
- settled status;
- pre-settled status;
- limited leave;
- dependant status; or
- another UK immigration permission.
If you may want to return to the UK in future, it is worth understanding whether extended residence overseas could affect your existing status.
Moving with family
Where a family is relocating together, the departure from the UK may involve additional arrangements. These can include:
- schools;
- childcare;
- property;
- dependant visas;
- healthcare;
- employment for a spouse or partner;
- documentation; and
- the timing of each family member’s move.
Not every member of the family necessarily needs to leave at the same time. In some cases, a staged move may be more practical.
What should be dealt with before departure?
The exact checklist will depend on your circumstances, but issues that commonly require attention include:
- immigration permission for the destination;
- UK tax residence;
- property;
- employment;
- business interests;
- investments;
- pensions;
- banking;
- insurance;
- healthcare;
- children’s schooling;
- documents and legalisation; and
- overseas accommodation.
Some of these issues can be addressed after relocation. Others may become harder to deal with once you have already left.
How Knightsbridge helps
We help clients consider the UK side of an international relocation before the move takes place.
Our role may include:
Assessing your position
Understanding what you are leaving behind and which UK connections may remain relevant.
Identifying issues
Highlighting tax, property, business, immigration and financial matters that may need attention.
Planning the sequence
Establishing which decisions should be made before departure and which can follow afterwards.
Coordinating advisers
Working alongside accountants, tax advisers, financial advisers, overseas professionals and other specialists where required.
Connecting the UK and overseas position
Ensuring that decisions made before leaving support the wider relocation strategy.
Before you leave the UK
The period before an international move can become focused on visas, flights, accommodation and the destination itself.
But decisions made in the UK before departure can have consequences long after the move has taken place.
If you are considering leaving the UK, we can help identify the matters that deserve attention before you relocate and coordinate them as part of your wider international relocation plan.
