The UK government is reportedly considering a new tax plan that would impose a 20% tax on business assets for individuals who decide to leave the country. This initiative, referred to as a “settling-up charge,” is aimed at aligning UK tax regulations with those of other G7 countries and is projected to generate approximately £2 billion for public finances.
Currently, while non-domiciliary status does not exempt individuals from the 20% capital gains tax on sales of UK property valued at over £6,000, it does offer some exemptions on other asset sales, such as shares in specific companies. The proposed tax would target these assets, requiring individuals to pay the tax upon exiting the UK.
A government source indicated that this settling-up charge is among several tax options being evaluated by the Treasury ahead of the upcoming budget, noting that no final decisions have been made at this stage. An expert highlighted that the absence of such a tax puts the UK in a unique position relative to other nations.
James Smith, research director at the Resolution Foundation think tank, described the intent of the tax as ensuring that individuals relocating to low-tax jurisdictions would still be liable for taxes on gains from UK assets. Currently, individuals can sell their assets without UK capital gains tax after moving abroad. Smith also pointed to potential risks, suggesting that if the tax is announced without immediate implementation, it could lead to capital flight as individuals move to avoid the charge. The proposed scheme may allow individuals to defer payment for several years if they choose not to liquidate their assets immediately.
Additionally, the initiative might include provisions to prevent capital gains tax on profits from investments made prior to arriving in the UK, aiming for a more equitable tax treatment. The Treasury has yet to comment on these developments.
Source: https://www.theguardian.com/politics/2025/nov/01/rachel-reeves-considers-20-tax-on-assets-of-people-deciding-to-leave-uk