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Adrian Kemp, wealth planning director at Canaccord Wealth, stresses the need for strategic planning, clear advice and a long-term view, as individuals react with concern to a potential ‘exit tax’
AS speculation builds ahead of next week’s UK’s Autumn Budget, one proposal is dominating conversations with our clients: a potential “exit tax” on individuals leaving the UK.
The idea of a 20% levy on unrealised gains from UK business assets has sparked concern, curiosity and, in many cases, action.
We’re hearing from more people who are worried about the implications. Some are asking whether they should accelerate plans to move abroad.
Others are reviewing their asset structures or exploring relocation to jurisdictions such as Jersey. Nearly half of the individuals who have contacted us to discuss wealth planning in the past few weeks have either moved assets offshore or are actively considering it in the next year.
We’re always clear. Speculation is just that until something is announced and people should avoid knee-jerk or emotional decisions when managing their finances.
Why now?
The UK faces a significant fiscal shortfall, and with income tax bands politically sensitive and the non-dom regime already reformed, the exit tax is being considered as a way of raising revenue without changing core rates. It could generate up to £2 billion annually and would bring the UK in line with other G7 countries, including France, Germany, Canada and the US, which already impose similar taxes.
Currently, individuals who become non-resident can often avoid UK capital gains tax on assets acquired or held during UK residence, provided they dispose of them after leaving and remain abroad for at least five years. The proposed exit tax would close this gap.
Has it worked elsewhere?
International experience is mixed. France’s exit tax has faced legal challenges and was scaled back in 2019. Germany and the Netherlands have expanded their regimes, with the Dutch version applying for up to five years post-departure. Canada and Australia treat assets as sold at the point of departure, triggering tax on unrealised gains.
The principle is straightforward: if wealth was built under a country’s legal and economic infrastructure, that country should be able to tax it before the individual departs. But in practice, enforcement is complex. Valuing private assets fairly, managing deferrals and avoiding double taxation are all challenges. Some argue that such taxes can deter investment and prompt pre-emptive departures, reducing their effectiveness.
What are we seeing?
The biggest concern among our clients is timing. If the tax is introduced with immediate effect, individuals may face significant liabilities unless they establish non-UK tax residence before Budget Day (26 November). This has already triggered a noticeable spike in inquiries from people looking to leave the UK or restructure their affairs.
We’re also seeing a shift in sentiment. For many, this is not just about tax. It’s about certainty, control and long-term planning. The idea of an exit tax has made people reassess their exposure to UK tax policy and consider whether now is the right time to make a move.
Jersey: A growing destination
For those looking to stay close to the UK while gaining greater control over their financial future, Jersey is increasingly attractive. It offers proximity, stability and a familiar regulatory environment. We’ve seen a marked increase in interest from UK-based clients exploring relocation to these jurisdictions.
According to the Henley Private Wealth Migration Report, the UK is forecast to lose 16,500 millionaires in 2025, more than any other country. While many are heading to the UAE, Switzerland or southern Europe, the Crown Dependencies remain a preferred option for those seeking continuity without compromise.
Planning considerations
For those contemplating a move, timing and structure are key. The UK’s statutory residence test is strict, and split-year treatment may be available, but only if individuals act quickly and meet the criteria. Deferred payment options may be introduced, but details remain unclear. There’s also the question of whether the tax would apply to UK assets only or extend to worldwide gains.
We’re advising clients to avoid knee-jerk decisions. Strategic planning, clear advice and a long-term view are essential. The exit tax may or may not be introduced, but the conversations it has sparked are already reshaping how people think about their financial futures.
The proposed exit tax reflects a broader shift in UK tax policy, one that prioritises revenue over mobility. For us as an integrated UK and Channel Islands wealth manager, it reinforces the importance of cross-border expertise and proactive planning.
For our clients, it’s a reminder that tax residency is no longer just a matter of location. It’s a financial decision with far-reaching consequences. Whether the tax is introduced or not, it’s already having an impact. And for Jersey, it may well accelerate our role as a preferred destination for internationally mobile wealth.
