20% Exit Tax Proposed for Wealthy Individuals Leaving UK

As the UK faces tighter budget conditions, its government is exploring a major change that could impact high-net-worth individuals: a proposed 20% exit tax. This new tax idea would target wealthy individuals who choose to leave the UK and could be implemented as early as November 26, 2025.

An exit tax is a fee some countries charge when individuals or companies move their tax residency or assets out of the country. It is meant to capture some of the tax revenue the government might lose when people leave.

Under the UK’s new proposal, wealthy individuals leaving the country could be required to pay 20% tax on capital gains they made while living in the UK. This includes gains on assets like:

• Shares
• Bonds
• Investment funds
• Other financial instruments

The aim is to ensure the UK treasury doesn’t lose out on taxing capital gains that were built up during the time the individual lived in the country.

The proposal specifically targets wealthy non-domiciled individuals, often called “non-doms.” These are people who live in the UK but claim their permanent home (domicile) is elsewhere. Many of them have significant global assets and benefit from the UK’s current tax rules.

Under current UK law, these individuals often pay tax only on the money they bring into the UK (remittance basis), not on their worldwide income or gains.

If the new exit tax is introduced:

• Individuals planning to relocate to countries with lower taxes might face a large capital gains bill before leaving.
• People who have accumulated wealth while living in the UK will be taxed on the gains they earned during that time.
• The tax would only apply if they change their tax residency from the UK to another country.

The UK government is searching for ways to balance its budget. This tax could generate around £2 billion per year. That’s a significant amount of revenue that could go toward funding public services like healthcare and education.

Governments around the world are also facing pressure to make tax systems fairer, especially after the economic challenges caused by the pandemic and inflation. Taxing wealthy individuals who have benefitted from the UK’s economic system is seen as one way to do this.

While the policy is still being reviewed, here are some ideas being considered:

• 20% tax on unrealized gains made during UK residency
• Deferred payment options for those unable to pay right away
• Exemptions for gains made before the person became a UK resident
• May only apply to individuals who leave after the policy start date

Exit taxes are not new. Many countries have some form of this rule in place:

• Canada taxes individuals who give up residency on capital gains
• France has an exit tax for people moving abroad
• The United States taxes certain individuals who give up U.S. citizenship or green cards

The UK’s proposal would bring it in line with these international practices, especially as countries compete to retain their wealthy residents.

If you are a high-net-worth individual currently living in the UK or considering leaving:

• Review your tax residency plans carefully with a legal or tax advisor
• Understand how an exit tax could affect your investment portfolio
• Consider if it is better to relocate before the policy is implemented
• Look into countries offering citizenship or residency by investment, which may have more favorable tax regimes

Yes. More countries are looking to ensure that individuals and businesses contribute their fair share of taxes, especially before relocating to low-tax jurisdictions. As public finances get tighter, governments may use tools like exit taxes to close budget gaps.

This makes it more important than ever for wealthy individuals to plan ahead. Residency and citizenship by investment programs can still offer tax efficiency, but only with the right planning.

Planning to Relocate? Make Every Move Count.

Before you make your next move, get the guidance you need to navigate new tax rules and protect your assets. Our team specializes in second citizenship and residency strategies that align with your financial goals.

Move smart. Stay secure. Invest globally.