Does an individual escape the UK tax net when they become non-UK resident?

Leaving the UK for tax purposes is a complicated matter. Becoming non-UK resident is not in itself enough to escape the UK tax net. In some cases the UK’s ‘tax tail’ can catch out individuals. Furthermore the capital gains tax (CGT) regime has been extensively widened over the last decade insofar as it applies to non-UK residents.

Temporary non-residence rules

An important point to note from the start is that the UK tax regime includes anti-avoidance rules known as the ‘temporary non-residence rules’ which seek to charge individuals to UK income tax or CGT on chargeable gains and certain income streams (such as dividends from closely held companies) generated while the individual is non-UK resident if they return to the UK shortly thereafter. These rules are designed to prevent individuals temporarily leaving the UK in order to realise substantial gains or income receipts in a...