An established rule, not a new exit tax
This is a planning explainer published on 29 October 2026, rather than news of a new charge. HMRC’s return guidance warns that certain income and gains received abroad may become taxable when someone returns after temporary non-residence. It expressly distinguishes wages and other employment income from that warning.
For a business owner comparing Portugal, Ireland or the UAE, the practical comparison should therefore include a return scenario. A move can work for family or commercial reasons while producing a different tax result from the one assumed in a headline-rate table. Decide what the move is intended to achieve before scheduling a sale.
Five years is a technical measurement
RDR3 describes a period of non-residence lasting five years or less between periods of sole UK residence, together with a residence-history condition covering at least four of the seven tax years before departure. The definitions include treaty status and qualifying parts of split years. The relevant endpoints are residence periods, not simply flights or dates on a visa.
HMRC also makes split-year treatment conditional on satisfying the applicable statutory case. Ask for the departure and return calculations in writing. Counting five birthdays abroad, or assuming every year automatically splits on moving day, is a weak substitute for that calculation.
Map the asset and the payment separately
HS278 (2026) is guidance for returns in the 2025–26 tax year, updated on 6 April 2026. It explains that covered gains can be treated as arising in the return year. It distinguishes assets held before departure from later acquisitions, with exceptions, and notes that UK land interests and certain UK trading assets can remain taxable during non-residence itself.
RDR3 separately identifies potentially affected receipts such as closely controlled company distributions and certain pension payments. A share disposal, a dividend and a pension withdrawal therefore need their own analysis. Moving the payment date alone is not a complete plan.
Compare the downside before the headline saving
Our editorial recommendation is to prepare three versions of the same plan: the intended stay abroad, an earlier family-driven return and a delayed transaction. For each, list the asset acquisition date, disposal date, receipt type, residence evidence and expected foreign tax. This exposes assumptions that a single destination ranking hides.
HS278 recognises that a foreign tax charge and a later UK return-year charge can overlap; double-tax relief may be available. Its scope and timing require checking. Ask advisers to show the cash-flow position before and after any relief rather than assuming that paying tax overseas necessarily finishes the question.