The GSB Guide to repatriation to the UK
This guide, written by GSB Wealth, will give you a better idea of what you need to start preparing for repatriation to the UK so you can avoid any nasty and expensive surprises in the future.
Should you sell assets before repatriating?
If you have time, begin reviewing your financial affairs 12 to 18 months before repatriation. Selling assets like property or investments before returning can be tax-efficient from a Capital Gains Tax (CGT) perspective. Moving after April 6th may also simplify your tax position.
However, circumstances may prevent you from selling assets beforehand. In such cases, tax-efficient planning strategies can mitigate potential liabilities on asset income. For example, structuring assets properly under the UK’s Foreign Investment Gains (FIG) regime can be critical.
Everyone’s circumstances are different. Repatriating may not be as complex for you as long as you take good financial advice from a professional.
Retiring back to Britain
If you transfer your funds or take benefits from your pension scheme, including a QROPS or an international SIPP, the scheme must report payments to HMRC. This requirement applies regardless of how long you’ve been a non-UK resident.
If you’ve started drawing an income from a pension scheme while abroad, that income will be subject to UK taxation upon your return. This is true for both UK-registered pension schemes, such as SIPPs, and international pension structures, like QROPS.
At this stage, it is crucial to seek professional advice to ensure that your pension income, along with other assets, is structured as tax-efficiently as possible.
For example, you may be able to reduce your tax liability through various strategies, such as:
- Drawing down a portion from the tax-free Pension Commencement Lump Sum (PCLS) to minimise taxable income.
- Utilising tax-deferred withdrawals, such as the 5% annual withdrawal allowance from an offshore bond.
- Using the Capital Gains Tax (CGT) annual exempt amount, which is £3,000 for the 2024–2025 tax year.
- Transferring assets between spouses, particularly if one spouse is a higher or additional rate taxpayer while the other is in a lower tax bracket.
Additionally, recent regulatory changes mean that many expats now favour international SIPPs over QROPS for their flexibility and tax advantages. However, the decision to transfer or consolidate pensions depends on individual circumstances and the specific tax rules applicable at the time of repatriation.
Failing to plan ahead could limit your choices and result in avoidable tax liabilities. By consulting a qualified financial adviser before your return to the UK, you can optimise your pension income and overall financial position.
Read more about UK expat pension planning.
How are funds taxed in the UK?
UK taxation is now based on residency and the duration of time spent outside the UK. The concept of domicile has been replaced with a residence-based system effective from 6th April 2025.
If you’ve been an expat for more than 10 years and have no UK assets at the time of death, your estate may not incur inheritance tax (IHT). However, the UK’s Temporary Non-Residence Rules could tax gains realised while living abroad if you return within five years.
The new Foreign Income and Gains (FIG) Regime provides 100% relief on foreign income and gains for new arrivals to the UK in their first four years of tax residence, provided they have not been UK tax resident in any of the 10 consecutive years prior to their arrival.
You will need to seek professional advice as your tax position is complex.
How to make and receive an international transfer
You will need to have a bank account in the UK if you want to receive funds from abroad. Simply supply the bank you’re transferring from with the following details about the account you’re transferring to:
- Your personal details
- Your bank’s SWIFT code
- IBAN (international bank account number) number
- BIC (business identifier code) when requested.
You may wish to use an international currency exchange firm for the transfer because many such companies charge low or zero fees for large transactions and often offer better exchange rates than your bank. Ensure you entrust a reputable, regulated company like GC Partners.
Don’t forget currency exchange issues
Income Tax
From 6 April 2025, the UK will shift from a domicile-based system to a residence-based system for IHT. Individuals who have been UK tax residents for at least 10 out of the previous 20 tax years will be classified as Long-Term Residents (LTRs) and will be subject to IHT on their worldwide assets.
As a non-resident expat you’re subject to tax on UK-source income only, such as rental income from UK properties, UK pension income etc. Where you are subject to UK income tax, the amount you pay will depend on your income level, which falls into each tax band.
Everyone has a personal allowance of £12,570 (2024 -2025), which you do not have to pay tax on. In terms of registering your arrival back in the UK with the taxman. “You may need to register for Self Assessment, e.g. if you start working for yourself or have other income or gains from the UK or abroad. You don’t need to register if you’re an employee and don’t have other untaxed income to report.”
You can find out more about self-assessment and who needs to send a tax return on HMRC’s website.
If you’re returning to the UK and taking up a job offer, you will likely need to fill in a Starter Checklist form from HMRC. This is for employees without a P45 (the form you’re given at the end of a period of employment in the UK, which provides details of your tax code, gross pay, and the tax paid for that year).
This Starter Checklist replaced the old P46 and gets you back on the taxman’s radar. Until your tax situation is clarified, you may also have to have an emergency tax code. Apply for both via HMRC’s website. For income tax, you are generally treated as a resident for the whole tax year. Therefore all income received in the tax year you become a UK resident will be subject to UK income tax.
There is, however, an extra-statutory concession for income tax which allows a ‘split-year treatment to be applied. That means income arising in the tax year of return (but before the actual return date) will not be subject to UK income tax. The rules for this are quite different to those applying capital gains treatment. And, income tax split year treatment is only available when an individual leaves or returns to the UK for work.
National Insurance
To qualify for UK state benefits, including the state pension, you must have sufficient NI contributions. You can:
- Check your NI record online.
- Make voluntary contributions to fill gaps in your payment history.
NI contributions vary based on employment status and earnings:
- Class 1: Paid by employed individuals.
- Class 2 & Class 4: Paid by the self-employed, with contributions ceasing at state pension age.
To receive the full new state pension, you typically need 35 years of NI contributions, although this can vary depending on your age and contribution history. Check here for more information.
After 5th April 2025, you will only be able to top up missing contributions for the last six tax years.
Updated Capital Gains Tax (CGT) Rates
When repatriating to the UK, it’s important to understand the implications of Capital Gains Tax (CGT) on your assets. CGT is charged on any profits (the ‘gains’) you make when you sell or transfer assets such as shares, unit trusts, or property that is not your main residence.
For the tax year 2024-2025, the annual CGT exemption has been significantly reduced to £3,000. This means you can make gains up to this amount each year without incurring CGT. Any gains above this threshold are subject to tax.
The CGT rates for the 2024-2025 tax year are as follows:
CGT Rates from 6th April 2024
Higher or Additional Rate Taxpayers:
- 24% on gains from residential property (effective from 30th October 2024).
- 20% on gains from other chargeable assets made between 6th April 2024 and 29th October 2024, rising to 24% after this date.
Basic Rate Taxpayers:
- Gains falling within the basic income tax band are taxed at 10% for assets other than residential property (rising to 18% from 30th October 2024).
- Gains exceeding the basic income tax band are taxed at 24% (residential property gains) or 20% for other chargeable assets (rising to 24% from 30th October 2024).
Planning Ahead to Minimise CGT
- Timing asset disposals: Consider selling assets before returning to the UK or before the 30th October 2024 rate increase.
- Using available exemptions: The annual CGT allowance of £3,000 can reduce taxable gains.
- Strategic tax planning: Spouses and civil partners can transfer assets to utilise both individuals’ tax allowances and lower-rate bands.
The Temporary Non-Residence Rules may apply if you return to the UK within five years of becoming non-resident. Gains realised during your time abroad could be taxed upon your return, so professional advice is critical to avoid unexpected liabilities.
Reviewing your investments and assets early ensures you can optimise your tax position and avoid costly surprises when returning to the UK.
Inheritance Tax (IHT)
Inheritance Tax (IHT) may be levied on the estate of a deceased person who was a UK resident at the time of death or who owned assets in the UK. The current IHT system remains focused on the nil-rate band (NRB) and residence nil-rate band (RNRB), both of which are fixed at their 2020–2021 levels until the end of the 2029–2030 tax year.
- The nil-rate band (NRB) remains £325,000 per individual and applies to all assets in the estate.
- The residence nil-rate band (RNRB) is £175,000, available for main residences passed to direct descendants. However, the RNRB is reduced by £1 for every £2 the net value of the estate exceeds £2 million (the taper threshold).
Unused portions of the NRB and RNRB can be transferred to a surviving spouse or civil partner, allowing qualifying estates to pass on up to £1 million tax-free. Any estate value exceeding these thresholds is taxed at 40%.
The NRB and RNRB thresholds have been frozen since 2020, and legislation announced in the Autumn Budget 2024 extends this freeze to 2029–2030. This measure is part of the UK government’s policy to support public finances and ensure sustainability.
Additionally, the IHT rules apply to:
- Lifetime chargeable transfers, such as gifts exceeding the annual exemptions made within seven years of death.
- Trustees managing relevant property trusts, who may face periodic and exit charges.
If you are a British expat and remain outside the UK for more than 10 consecutive years, with no UK-based assets at the time of your death, your estate would generally not be subject to IHT. However, planning ahead is crucial to ensure your estate is structured efficiently to take full advantage of reliefs and exemptions. Consulting a qualified financial adviser is essential to align your estate planning with the latest regulations.
Potentially Exempt Transfers (PETs)
PETs are gifts that potentially qualify for an exemption and are made, in general, to either an individual or an absolute trust. A potentially exempt transfer will only become chargeable to IHT if the donor fails to survive for seven years from the gift date. In this instance, it is regarded as a failed PET.
On death within seven years of the gift, the value of the failed PET is added to the donor’s estate, along with any other gifts made by the donor in the seven years before death. Only where the value of the failed PET, when added to any earlier gifts within seven years, exceeds the prevailing NRB (£325,000 in the current tax year) will IHT become payable on the failed PET.
If there is an IHT liability on the PET, this may be reduced by taper relief if the donor has survived at least three years from the date of the gift. The relief is calculated as a percentage reduction of up to the full IHT rate depending on the time between the gift and the date of death.
- 0-3 years from gift - 40% Taper Relief
- 3-4 years from gift - 32% Taper Relief
- 4-5 years from gift - 24% Taper Relief
- 5-6 years from gift - 16% Taper Relief
- 6 -7 years from gift - 8% Taper Relief
- 7+ years from gift - 0% Taper Relief.
UK property for expats returning to live in Britain
If you’ve been away from the UK for a long time, things may have changed significantly concerning getting a rental contract or a mortgage. Most letting agents require references from previous landlords and will run a credit check on you before allowing you to rent a property.
As a returning expat, you can fall at each of these hurdles. You may not have up-to-date references, and your credit history may not reflect your current or recent earnings. If you’re returning to a job, this can help. You will be able to show proof of earnings (albeit anticipated earnings), a contract and a reference from your employer. However, if you’re returning for retirement, self-employed or currently unemployed, this can make things more challenging.
Many letting agents will consider your application favourably if you can pay a lump sum for rent in advance. Most private rented tenancies are let on an assured short-hold basis (AST). This means your landlord has the right to bring your tenancy to an end after its fixed term. If the tenancy does not have a fixed term, they can bring it to an end after six months. You will be required to pay a deposit upfront (usually 1 or 2 months’ rent), and it would be sensible to have contents insurance in place. And if you are returning with pets, your options are likely to be more limited, so start searching early if this is the case. (You may also need to pay a pet deposit).
Buying UK property – proof of funds
When buying property, a very important part of the conveyancing process is understanding the source of the purchaser’s funds. As an expat or recent repatriate, you may be asked for additional proof if you bring money in from overseas (and/or your funds were earned or accrued overseas).
Solicitors handling the conveyancing process are guided by Money Laundering Regulations 2017, which mention the source of funds in two places:
- Regulation 28 (S11(a)) - Scrutinise transactions undertaken throughout the course of the relationship (including, where necessary, the source of funds) to ensure the transactions are consistent with the relevant person’s knowledge of the customer, his business and risk profile.
- Regulation 35 (S5(b)) - Take adequate measures to establish the source of wealth and source of funds which are involved in the proposed business relationship or transactions with that person.
Furthermore, the Law Society states;
“In many ways, client identification and verification is secondary in anti-money laundering compliance to understanding the source of funds.”
Cash is not an acceptable option. The onus is on you to prove your funds are not from the proceeds of crime, and if your solicitor has doubts, they are obliged by law to report you for suspicion of money laundering. For this reason, have as many wage slips, bank statements, contracts, etc.
However, be aware that the receiving bank in the UK may also require proof of the source of funds before clearing them This again takes time. Be prepared to answer questions about particular transactions on your bank statements, too, especially if they are frequent payments or large transactions. A delay in the process could cost you the property of your dreams.
Getting a mortgage
Most big-name lenders in the UK make getting a mortgage for a repatriating Briton difficult.
The first hurdle? Not having a UK address in the last three years. Mainstream lenders carry out a credit score. You probably won’t have enough points without a recent UK address, and will be declined.
Fortunately, there are other lenders who credit check instead of credit scores and assess cases individually. Underwriters for these firms will look at your credit record to ensure that there is nothing untoward in your financial background.
And they won’t care so much about the fact you’ve been living abroad. Assuming all is well with your credit check, you have a deposit and can prove you can meet repayments, you should be able to find a willing lender. If you’re currently abroad and you’re planning to return and buy a property within the first year or so, these steps might help you plan:
Keep a correspondence address in the UK
This can be your parents’ address or another relative’s home address, as long as it’s the home of someone you trust, as your mail will be received there.If possible, retain a UK current account and a credit card
Make sure your bank will allow your accounts to remain open if you live overseas.Have a job lined up for when you return
If you’re staying with the same employer, this will make things easier and quicker for you, but if you are moving to a new firm, you may have to wait 3–6 months to get a mortgage. Depending on the mortgage company you’re applying to, some may accept a letter of appointment with a start date, your salary details, and your contract and employment references.For anyone returning to be self-employed
You’re unlikely to be accepted for a mortgage without at least a year’s worth of audited accounts; sometimes, lenders want to see the last three years of accounts.Make sure you have a deposit of at least 25%
Some lenders will accept less… but they are few and far between for repatriating Brits.
Council tax
Electoral register
Insurance
Importing your personal effects and pets
Depending on where you’ve been living and how many possessions you’ve acquired, you may be able to return with just a suitcase. Chances are. However, you will require a container.
If you’re likely to return before your belongings, pack carefully to ensure you have the essentials you need while the rest is in transit. Also, plan to live in the UK without all your things for some duration and get Customs clearance. You will need a valid visa and a declaration form to bring your personal effects into the UK. You will also be required to list all the items brought into the country.
You will have to estimate acquisition dates and current values, and any items that you bought between six to twelve months before moving back to the UK may be subject to VAT charges. Remember that no liquids or consumables can be brought back via shipping containers, including toiletries and even candles. Otherwise, your personal belongings should be considered duty-free.
Those with large or many possessions will find it much easier to employ an international removal company or a separate import agent service and removal company. The agent and the international removal company will have the expertise and experience required to help your importation smoothly.
Fees charged will vary and depend on the cubic volume of effects to be returned, the container size, the place of origin and the ultimate destination. It’s wise to get a few quotes and to plan well in advance because shipping times can be long.
Tip: You can get a good deal if you are willing to share a container with other movers. So ask your relocation company for details.
You will have to pay a fee for the customs clearing agent who looks at your shipping container. And include copies of your passport and visa for the customs agent too.
Any delays on arrival at UK customs could be chargeable to you for storage, and of course, your goods may be subject to random checks.
It is possible to import medication, although customs will require all medication to be in its original labelled container with English instructions. Some medicine, such as controlled drugs, will require a doctor’s letter and a personal licence, and the amount allowed in will be restricted.
Importing vehicles
You have 14 days to inform HMRC that your vehicle has arrived in the UK. Your vehicle also needs to meet UK driving and safety standards. A European Certificate of Conformity and a Mutual Recognition Certificate are required for vehicles imported from the EU. A new car will require additional VAT, duty, tax payments, and registration once it arrives. HMRC sets VAT, and the registration department will determine the vehicle tax to be paid. A NOVA form and DVLA registration will be required for vehicles imported from any country, not in the EU. VAT and vehicle tax must also be paid.
Bringing your pets home
The rules around live animal importation are fairly easy to understand and navigate. It’s wise to seek the help of a specialist transportation company to ensure your pets are cared for in transit. They also ensure all required documentation is in place to avoid enforced quarantine on arrival.
In the case of dogs, cats, and even ferrets, this is what the government has to say:
You can enter or return to the UK with your pet if it:
- has been micro-chipped;
- has a pet passport or third-country official veterinary certificate; and
- has been vaccinated against rabies - it will also need a blood test if you’re travelling from an unlisted country.
Dogs must also have a tapeworm treatment. Your pet may be put into quarantine for up to 4 months if you don’t follow these rules – or refused entry if you travel by sea. You’re responsible for any fees or charges.
It’s also worth checking with different airlines to see how they treat animals in transit, as some have much more favourable reviews than others. Bear in mind you may need to fly your pets, or all of you if you want to travel together, into a different airport in the UK than you had planned, as not all airports accept animals and the costs can vary widely as not all airports accept animals and the costs can vary widely.
Accessing the NHS
If you return to the UK and become unwell before registering for a GP surgery, you can, of course, dial 999 or visit an accident and emergency hospital department. Alternatively, 111 is the number for medical help and advice.
The NHS is a residence-based healthcare system. This means the free provision of NHS treatment is based on whether you’re ordinarily resident in the UK or not. It doesn’t depend on a person’s nationality, payment of UK taxes or national insurance contributions, owning a property in the UK, or even being registered with a GP or having an NHS number. Therefore, as a British citizen returning to live in the UK, you will be immediately entitled to free NHS care. Only if you reside exclusively and permanently overseas and are visiting the UK may you be charged for treatment.
Registering with a doctor
Finding a dentist and ‘Denplan’
Depending on how long you’ve been away from the UK, you may be unaware that seeing an NHS dentist can be extremely difficult.
Many UK residents now have private dental insurance. Using the NHS Choices website, you can search and see if there are any dentists near you offering NHS treatment. Those that do also often offer private practice as well. Make sure you clarify what you will be eligible for as an NHS patient before agreeing to any treatment. Your dentist should be able to outline what may be covered and what you may have to subsidise, as some procedures aren’t offered on the NHS anymore.
If you can, take any record of dental treatment carried out while living overseas home with you that will be a benefit to your new dentist in the UK. If you need to see a dentist urgently before you’ve registered with one, dial 111 for assistance. Many returning expats report feeling disconnected when they return ‘home’ to a country that no longer feels like home.
A lot may have changed in Britain since you left, and it’s not uncommon to find adjusting hard. If you anticipate and accept that you might experience a degree of reverse culture shock, it may help you adjust to your return more quickly. The good news is most government agencies, councils and service providers in the UK have embraced technology, and everything you’re likely to need is available online.
At GSB, we explore all the different aspects of your goals, taking everything into account to create a financial plan that works for you throughout life’s events.
FAQs
Reviewing and potentially selling assets 12-18 months before repatriation is advisable to minimise capital gains tax. However, if selling isn't possible, planning can mitigate potential taxes on asset income.
Upon repatriation to the UK, your funds are taxed based on your residency status. As a UK tax resident, you are liable for tax on your worldwide income and gains, while non-residents are taxed only on UK-sourced income. The Temporary Non-Residence Rules may apply if you return to the UK within five tax years, potentially subjecting gains made abroad to UK taxation. Income tax is charged on worldwide income, with a personal allowance of £12,570 for the 2024–2025 tax year. For capital gains, the annual exemption is £3,000, with gains above this taxed at rates up to 24% for higher-rate taxpayers from 30 October 2024. The Foreign Income and Gains (FIG) Regime, starting in April 2025, offers 100% relief on foreign income and gains for the first four years of UK tax residency, provided you have not been a UK tax resident in the preceding 10 years. Effective planning and professional advice are crucial to optimise your tax position and ensure compliance with UK regulations.
Seek advice to manage income tax efficiently, using options like tax-deferred withdrawals or spousal asset transfers.
When repatriating to the UK, understanding Capital Gains Tax (CGT) implications is essential, as gains made on the sale or transfer of assets such as shares, property (excluding your main residence), or investments may be taxable. For the 2024–2025 tax year, the annual CGT exemption is £3,000, meaning gains above this threshold are subject to CGT. From 30 October 2024, rates for higher and additional rate taxpayers are 24% for residential property and 24% for other assets, while basic rate taxpayers pay 18% for residential property and 10% for other assets within their basic rate tax band. The Temporary Non-Residence Rules could tax gains realised while abroad if you return to the UK within five years of becoming non-resident. To minimise liabilities, you can use exemptions, strategically time asset disposals, and consider transferring assets between spouses to utilise both allowances. Planning ahead and consulting a financial adviser is crucial to ensure compliance and optimise your tax position.
When repatriating to the UK, managing your National Insurance (NI) contributions is crucial to ensure eligibility for state benefits, including the state pension. To qualify for the full new state pension, you typically need 35 years of NI contributions, although partial pensions are available with fewer years. Before returning, check your NI record online to identify any gaps in your contribution history. You can make voluntary contributions to fill gaps, either while abroad or after repatriating, to maximise your state pension entitlement. From April 2025, you can only top up gaps for the previous six tax years, so it’s essential to act promptly if you have older gaps to address. The type of contributions you make depends on your employment status: Class 1 is paid by employees, while Class 2 and Class 4 are for the self-employed, with contributions ceasing at state pension age. Consulting with a financial adviser can help you navigate the rules and ensure your contributions align with your retirement goals. Check more information on the gov.uk site here.
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Disclaimer
THIS PAGE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH.
THE TAX TREATMENT IS DEPENDENT ON INDIVIDUAL CIRCUMSTANCES AND MAY BE SUBJECT TO CHANGE IN FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.
THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.
THE INFORMATION ON THIS WEBSITE IS DIRECTED ONLY AT PERSONS OUTSIDE THE UNITED KINGDOM AND MUST NOT BE ACTED UPON BY PERSONS IN THE UNITED KINGDOM.