The proposed \u201csettling up charge\u201d would levy a 20% tax on gains embedded in assets, such as shares or bonds, at the point of exit, echoing elements of the US expatriation regime. According to a report by The Times, the measure could raise approximately \u00a32 billion per year.<\/p>\n
Currently, non-residents pay UK capital gains tax on UK property and land, but once they leave, they often pay nothing on other assets.<\/p>\n
Government officials are discussing options that would allow people to defer payment over several years and exempt gains accrued before they became UK residents. <\/p>\n
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If adopted, the government could legislate the proposal in the Budget and implement it immediately upon announcement on November 26, 2025, or from the start of the following tax year in April 2026.<\/p>\n The Treasury says it is modelling options and has made no decisions, yet Reeves\u2019s tone seems to suggest that taxes will rise somewhere; Labour pledged not to increase income tax, VAT, or National Insurance in its manifesto, narrowing the scope to wealth and capital.\u00a0<\/p>\n Potentially-Imminent Capital Flight\u00a0<\/p>\n Conservative leader Kemi Badenoch dismissed Reeves\u2019s speech as \u201cone long waffle bomb\u201d and a \u201cmasterclass in managed decline,\u201d and urged spending restraint instead of new levies. The Liberal Democrats called the looming Budget \u201ca bitter pill.\u201d<\/p>\n Marco Mesina<\/a>, an Italian tax attorney and founder of Move to Dolce Vita, argues that the proposal will backfire. He says \u201cfear-based taxation\u201d accelerates departures and deters arrivals of wealthy individuals, and that \u201cthose still undecided about leaving will simply accelerate their departure,\u201d which may inadvertently trigger another wave of capital flight<\/a> from the UK.<\/p>\n
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