Leaving the UK Before the 28 October Budget: Exit Tax and Days
What a UK business owner pays in 2026, what the 28 October Budget could change, why there is still no exit tax on people who leave, and the day counts that end UK residence.
A UK business owner who takes £1,000,000 of profit out of their own company pays about £531,000 of it in tax: 25% corporation tax, then up to 39.35% on the dividends. The tax burden is on course for its highest level since records began in 1948, and the thresholds are frozen until April 2031, so the share keeps rising without a single rate changing.
What makes the date matter is the other side of it. The UK still has no exit tax: you can leave with your company shares and your crypto and pay nothing for leaving. An exit charge has been proposed, the Treasury looked at one in 2025, and nobody has ruled out a charge on people who go. The first Budget under Prime Minister Andy Burnham is on 28 October 2026.
- Top income tax rate
- 45% above £125,140
- The £100,000 band
- 62% effective
- Company profit
- 25%, then up to 39.35% on dividends
- Capital gains
- 24%, or 18% on the first £1m of a business sale
- Inheritance tax
- 40%, business relief capped at £2.5m
- Exit tax today
- None on individuals
- The Budget
- 28 October 2026
- Leaving cleanly
- Under 16 days, or 45 to 120 by ties
What you pay now
Income tax reaches 45% above £125,140, with 2% national insurance on top. Between £100,000 and £125,140 the personal allowance is withdrawn, which makes that slice of income cost about 62%.
A company pays 25% corporation tax on its profit, and you pay up to 39.35% on what you take out as dividends.
| Item | Cost |
|---|---|
| Corporation tax25% of the profit | £250,000 |
| Dividend taxUp to 39.35% of what is left | About £281,000 |
| Total | About £531,000, so you keep under half |
An investor pays 24% on capital gains, up to 39.35% on dividends, and 45% on interest and rent. From April 2027 interest and rent go to 47%.
What has already gone up
- Capital gains tax: 20% to 24% for disposals from 30 October 2024, with immediate effect on the day of that Budget.
- Selling your own business: the rate on the first £1,000,000 of gains has gone from 10% to 18%.
- Employer national insurance: 13.8% to 15%, on more of each salary, from April 2025.
- Inheritance tax reliefs: business and farm property gets full relief only on the first £2,500,000 from April 2026, and 50% relief above it, which works out at 20%.
- Pensions: unused pension funds count as part of your estate for inheritance tax from April 2027.
- Expensive homes in England: a surcharge of £2,500 to £7,500 a year on top of council tax for homes worth £2,000,000 or more, from April 2028.
Thresholds are frozen until April 2031, so every raise, every good year and every bit of inflation pushes more of your income into the top bands. That freeze is doing most of the work behind the rising tax burden.
What 28 October could change
Nothing is announced. Burnham has promised not to raise the rates of income tax, VAT, national insurance or corporation tax, and has also said Britain overtaxes workers and undertaxes wealth. His Chancellor, John Healey, has repeatedly declined to rule out tax rises. So the proposals in circulation are about wealth rather than salary.
The first is capital gains taxed like income. A plan from the Centre for the Analysis of Taxation at the University of Warwick, listed among the Chancellor's options, would tax gains at income tax rates: up to 45% instead of 24%. On a £5,000,000 gain that is about £2,250,000 instead of about £1,200,000. The same plan includes a charge on unrealised gains when someone emigrates.
The second is a wealth tax. Oxfam and Tax Justice UK propose 2% a year on everything you own above £10,000,000. At £20,000,000 that is £200,000 every year, out of assets that may produce no cash at all. Burnham has said he would not rule it out.
The exit tax that does not exist yet
Today the UK has no general exit charge on individuals. Once you stop being UK resident, the UK stops taxing your gains, apart from on UK property and on shares in companies that are rich in UK property. You can leave holding your company and your portfolio, sell later, and owe the UK nothing for the act of leaving.
That is not how most of the rich world works. Germany taxes the gain on holdings of 1% or more when you go, France on securities above €800,000, Canada treats your assets as sold on the day you leave, and Australia does the same through its own departure rules.
The UK has come close twice. In November 2025 the Treasury was reported to be looking at a 20% settling-up charge on the shares and business assets of people leaving, worth about £2,000,000,000 a year, and dropped it before that Budget. In June 2026 Burnham would not rule out an exit tax on individuals. The ruling out that made headlines in September was the business department's, and it was about companies moving abroad with technology built on public research money, not about people.
On a company worth £5,000,000 that you started with nothing, a 20% charge on the way out is about £1,000,000 — payable for leaving, with nothing sold and no cash received.
How to leave properly
Leaving means actually leaving. The statutory residence test decides it, and day counts only matter alongside your ties to the UK.
Spend fewer than 16 days a year here and you are not resident, whatever else is true. Above that, the number of days you can spend depends on how many ties you keep: a home available to you, a partner or children resident here, work here, and having spent more than 90 days here in either of the previous 2 tax years.
| Compared | Ties you keep | Days you can spend in the UK |
|---|---|---|
| Family moves with you, home sold or let out, no UK work | 1 | 120 |
| Same, but you keep a flat you can stay in | 2 | 90 |
| Family stays in the UK and you keep the home | 3 | 45 |
| Most of your life still here | 4 | 15 |
Those are the limits for someone who has just left. They loosen from the fourth tax year out, once the 90-day tie drops away.
3 things catch people after the move:
- Coming back too soon. If you were UK resident in 4 of the 7 tax years before you left and you return within 5 years, gains on assets you owned before leaving and sold while away are taxed in the year you come back.
- The company stays behind. A UK-incorporated company remains a UK taxpayer wherever you live, so moving yourself does not move it.
- Inheritance tax follows you. Having been UK resident for 10 of the previous 20 tax years keeps everything you own inside UK inheritance tax for 3 to 10 years after you go, depending on how long you were here.
So the home, the company, the assets and the family all have to be dealt with before you leave, and in the right order. That sequence is the work, not the plane ticket.
Where people go
| Compared | Dubai | Cyprus | Spain | Italy |
|---|---|---|---|---|
| Days to be tax resident | 90, with a visa and a home | 60, with conditions | Ordinary 183-day rules | Ordinary 183-day rules |
| What you pay | 0% personally | Almost nothing on dividends and interest for 17 years | No Spanish tax on foreign income for 6 years | A flat €300,000 a year on foreign income |
| The catch | The region has been unsettled since the strikes on the UAE in February | Company profit is taxed at 15% before dividends | You need a qualifying reason to move, such as a job or a directorship | It only pays above roughly €1,150,000 a year |
One more route is worth checking before any of them: if a grandparent was born anywhere on the island of Ireland, including Northern Ireland, you can register as an Irish citizen and hold an EU passport. That removes the visa question from Cyprus, Spain, Italy and everywhere else in the EU.
Questions
Does the UK have an exit tax?
Not on individuals, as at September 2026. Once you are non-resident the UK stops taxing your gains, apart from UK property and shares in property-rich companies. A 20% charge on leavers was considered in November 2025 and dropped, a think tank plan now in circulation includes one, and nobody has ruled out a charge on people who leave.
How many days can I spend in the UK after leaving?
Fewer than 16 a year is safe whatever your ties. Above that it depends: 120 days with 1 tie, 90 with 2, 45 with 3 and 15 with 4. Ties are a home available to you, a UK-resident partner or child, UK work, and more than 90 days here in either of the 2 previous tax years.
What happens if I move back?
If you were UK resident in 4 of the 7 tax years before leaving and you return within 5 years, gains you made while away on assets you already owned are taxed in the year of your return. Staying out for 5 complete years avoids that.
Does my UK company have to move too?
A UK-incorporated company stays a UK taxpayer wherever you live, so its profits keep being taxed here. Whether to move it, close it or leave it running is a separate decision from your own residence, and it has its own tax consequences.
Am I free of inheritance tax when I leave?
Not immediately. If you were UK resident for 10 of the previous 20 tax years, your worldwide estate stays in UK inheritance tax for 3 to 10 years after you leave, depending on how long you were resident. UK assets, including shares in UK companies, stay in it permanently.
What could actually change on 28 October?
Nothing is announced. The proposals being discussed are capital gains taxed at income tax rates, up to 45%, and a 2% annual wealth tax above £10,000,000. The rates of income tax, VAT, national insurance and corporation tax have been ruled out.
Is it too late to leave before the Budget?
Leaving is a tax-year question, not a single date, and a move made now can still put you outside the UK for the year you sell. What the date changes is the rules you leave under: an exit charge announced on 28 October could apply from that day.
Where do most people go?
Dubai for 0% personally on 90 days a year, Cyprus for 60 days inside the EU with almost no tax on dividends for 17 years, Spain for 6 years free of Spanish tax on foreign income if you have a qualifying reason to move, and Italy for a flat charge that suits very large incomes.
What to do with this
If you are going to leave, the useful thing is to know what leaving would cost you today, and what it would cost if a charge on leavers is announced. The gap between those 2 numbers is the argument for doing it now rather than next year.
If you are staying, the same exercise tells you what to hold, what to sell and what to move before the rules change under you.
Either way it depends on what you own, how you take money out of it, and where you would go. If you are running a business at 7, 8 or 9 figures, or you are a high-net-worth individual, book a consultation and we will go through your position and tell you what we would do.
