Moving to the UK: Tax Planning for Relocating Expatriates
The moment you arrive in the UK, a new set of tax obligations begins. Pre-arrival planning is the most effective way to protect your financial position.
Relocating to the UK triggers a comprehensive review of your tax position. From the date you become UK tax resident, your income, gains, and potentially your worldwide estate may fall within the UK tax net. The time to plan is before you arrive, not after.
The UK Statutory Residence Test
Whether you are UK tax resident in any given year is determined by the Statutory Residence Test (SRT). The SRT uses a combination of automatic residence and automatic overseas tests, and, for those who are neither automatically resident nor automatically overseas, a series of connection factor tests. We apply the SRT precisely to your circumstances and advise on the implications of your residency position.
Split Year Treatment
In the year you arrive in (or depart from) the UK, split year treatment may apply, dividing the tax year into a UK part and an overseas part. This means you are only treated as UK resident for the portion of the year you were actually in the UK, reducing your UK tax liability for that transitional year. We identify which split year case applies to your circumstances and ensure it is claimed correctly on your tax return.
Non-Domicile Status and the Remittance Basis
If you are not domiciled in the UK, you may be able to claim the remittance basis of taxation in your early years of UK residence. This means foreign income and gains are only taxed in the UK when (and to the extent) they are brought into the UK. The remittance basis charge applies for long-term UK residents. Careful structuring of overseas accounts and income flows before you arrive can significantly reduce the risk of inadvertent UK tax charges.
Inheritance Tax Implications of Moving to the UK
Every year you are UK tax resident takes you closer to Long-Term Resident (LTR) status, the point at which your worldwide estate becomes subject to UK inheritance tax. We monitor your LTR clock, advise on the steps available before you reach 10 years' UK residence, and model the IHT impact of your projected UK stay.
Frequently Asked Questions
Ready to take control of your UK tax position?
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