Seeking Advice on Ceasing UK Tax Residency - Dual National Moving to EU

babetak

Hi everyone,

I'm hoping to draw on the collective wisdom of this forum for my tax situation. I'd be very grateful for any insights you can offer.

My Situation:

• I am a dual British/EU citizen, currently living and working in London.
• I participate in my company's Staff Share Scheme and I am expecting a significant payout in around October 2026 (it's not in options but a scheme where I've put my own money in and based on company's performance /this is a privatly held company/, they will pay me a profit when I exit the scheme). 
• To legitimately reduce my tax liability on this payout, I am planning to cease my UK tax residency. My intention is to quit my job and physically leave the UK at the end of August 2025 and move to another EU country.

My Questions:

I'm trying to understand the precise process and rules for ending my UK tax residency. My specific questions are:

1. Informing HMRC: What is the exact procedure for notifying HMRC that I am leaving the UK and will no longer be a tax resident? How and when should this be done? For example, if I leave on August 31st, 2025, when do I need to inform them, and is there a specific form (like the P85) or process I must follow?

2. Proving Non-Residency & The SRT: A friend mentioned that the rules for proving non-residency are very strict. He suggested I might only be able to visit the UK for fewer than 12 days a year. Could anyone clarify the specific rules under the Statutory Residence Test (SRT) that would apply to my situation? I do not own any property in the UK and can limit my time here, but I'd like to understand the exact limits on visits.

3. UK Financial Ties:

   • Bank Account: Am I permitted to keep my UK bank account open? The payout from the share scheme will be sent to this specific account, so closing it isn't really an option.
   • Personal Loan: I have a personal loan with HSBC UK for around £19,000. Will I be required to pay this off in full before I leave, or can I continue to make the regular monthly payments from my UK account after I've moved to the EU?
   • Stocks & Shares ISA: What are the rules regarding my Stocks & Shares ISA? Do I have to sell my holdings and close the account before I leave, or can I maintain it as a non-resident (understanding I can't contribute further)?

4. Other Restrictions: Are there any other "ties" or restrictions I need to be aware of and strictly adhere to in order to ensure I am unequivocally considered a non-resident for tax purposes by HMRC during this period?

My goal is to do this completely by the book. Any advice, pointers, or personal experiences you could share would be incredibly helpful in my planning.

Thank you so much in advance!
---------------------------------------------

AI seems to think my plan will not work at all: 

The central issue is that HMRC generally taxes employment income based on where the work was performed to earn that income, not where you are resident when you receive the payout.

For most employment-related securities (like staff shares), the payout you will receive in October 2026 will likely be considered earnings from your employment in the UK before you left. If this is the case, leaving the UK will not extinguish the UK's right to tax this income. The income will be subject to UK Income Tax and potentially National Insurance Contributions (NICs), regardless of your residency status in October 2026.

The specific tax treatment can depend on the exact type of share scheme (e.g., Save As You Earn (SAYE), Company Share Option Plan (CSOP), Enterprise Management Incentives (EMI), or an unapproved scheme). Each has slightly different rules, but the principle of taxing rewards for UK service generally holds.

How can I find out the exact type of the share scheme? I tried to ask more details for tax purposes but didn't get any relevant answers from the person handling this in the company. 

poseidon1

babetak said:

Hi everyone,

I'm hoping to draw on the collective wisdom of this forum for my tax situation. I'd be very grateful for any insights you can offer.

My Situation:

• I am a dual British/EU citizen, currently living and working in London.
• I participate in my company's Staff Share Scheme and I am expecting a significant payout in around October 2026 (it's not in options but a scheme where I've put my own money in and based on company's performance /this is a privatly held company/, they will pay me a profit when I exit the scheme). 
• To legitimately reduce my tax liability on this payout, I am planning to cease my UK tax residency. My intention is to quit my job and physically leave the UK at the end of August 2025 and move to another EU country.

My Questions:

I'm trying to understand the precise process and rules for ending my UK tax residency. My specific questions are:

1. Informing HMRC: What is the exact procedure for notifying HMRC that I am leaving the UK and will no longer be a tax resident? How and when should this be done? For example, if I leave on August 31st, 2025, when do I need to inform them, and is there a specific form (like the P85) or process I must follow?

2. Proving Non-Residency & The SRT: A friend mentioned that the rules for proving non-residency are very strict. He suggested I might only be able to visit the UK for fewer than 12 days a year. Could anyone clarify the specific rules under the Statutory Residence Test (SRT) that would apply to my situation? I do not own any property in the UK and can limit my time here, but I'd like to understand the exact limits on visits.

3. UK Financial Ties:

   • Bank Account: Am I permitted to keep my UK bank account open? The payout from the share scheme will be sent to this specific account, so closing it isn't really an option.
   • Personal Loan: I have a personal loan with HSBC UK for around £19,000. Will I be required to pay this off in full before I leave, or can I continue to make the regular monthly payments from my UK account after I've moved to the EU?
   • Stocks & Shares ISA: What are the rules regarding my Stocks & Shares ISA? Do I have to sell my holdings and close the account before I leave, or can I maintain it as a non-resident (understanding I can't contribute further)?

4. Other Restrictions: Are there any other "ties" or restrictions I need to be aware of and strictly adhere to in order to ensure I am unequivocally considered a non-resident for tax purposes by HMRC during this period?

My goal is to do this completely by the book. Any advice, pointers, or personal experiences you could share would be incredibly helpful in my planning.

Thank you so much in advance!
---------------------------------------------

AI seems to think my plan will not work at all: 

The central issue is that HMRC generally taxes employment income based on where the work was performed to earn that income, not where you are resident when you receive the payout.

For most employment-related securities (like staff shares), the payout you will receive in October 2026 will likely be considered earnings from your employment in the UK before you left. If this is the case, leaving the UK will not extinguish the UK's right to tax this income. The income will be subject to UK Income Tax and potentially National Insurance Contributions (NICs), regardless of your residency status in October 2026.

The specific tax treatment can depend on the exact type of share scheme (e.g., Save As You Earn (SAYE), Company Share Option Plan (CSOP), Enterprise Management Incentives (EMI), or an unapproved scheme). Each has slightly different rules, but the principle of taxing rewards for UK service generally holds.

How can I find out the exact type of the share scheme? I tried to ask more details for tax purposes but didn't get any relevant answers from the person handling this in the company. 

Per thread below you have already  had a go at soliciting a view of your tax position on eventual encashment of your share options.

https://forums.moneysavingexpert.com/discussion/6584476/capital-gains-tax-on-staff-share-scheme-proceeds-moving-abroad#latest

That seems to have been inconclusive back then, and given you have no new information to provide this time around on the nature of your scheme and its detailed terms and conditions, doubtful forum contributors will be able to add much to previous comments.

Seems to me you need professional (paid ) advice from a cross border tax specialist who can delve into the specifics of your firm's scheme as well as the specific exit rules appertaining to your 'domicile' tax status . Seems despite holding British citizenship, you may qualify as non dom  where UK tax exit rules have recently changed.

Any reason for not pursuing professional advice?

babetak

@poseidon1 Thank you for your message. I would love to pay for professional advise and I already tried to find someone via Unbiased but I was very disappointed by the person who called me via that service as they did not seem knowledgeable at all. If you have any suggestions on how to best find a qualified professional for my situation, I would be most grateful. 

Also, I've posed the following question to my company: 

I understand that the company cannot provide tax advice, but I am in the process of finding a qualified tax adviser to assist me with matters related to the staff share scheme. To facilitate this, could you provide a clear explanation of the scheme that would be understandable to tax professionals? This would be invaluable in ensuring I find the right adviser. 

Their answer: 

The scheme is not an HMRC scheme as such, you simply own shares in a Private Limited Company, those shares have an inherent Base Cost which is essence what you paid for them and this is detailed on your Completion Statement and also the documentation for shares you have acquired through the Staff Share Scheme in recent times. 

Is this enough information to provide to the tax professional I will hire you think? 

poseidon1

babetak said:

@poseidon1 Thank you for your message. I would love to pay for professional advise and I already tried to find someone via Unbiased but I was very disappointed by the person who called me via that service as they did not seem knowledgeable at all. If you have any suggestions on how to best find a qualified professional for my situation, I would be most grateful. 

Also, I've posed the following question to my company: 

I understand that the company cannot provide tax advice, but I am in the process of finding a qualified tax adviser to assist me with matters related to the staff share scheme. To facilitate this, could you provide a clear explanation of the scheme that would be understandable to tax professionals? This would be invaluable in ensuring I find the right adviser. 

Their answer: 

The scheme is not an HMRC scheme as such, you simply own shares in a Private Limited Company, those shares have an inherent Base Cost which is essence what you paid for them and this is detailed on your Completion Statement and also the documentation for shares you have acquired through the Staff Share Scheme in recent times. 

Is this enough information to provide to the tax professional I will hire you think? 

Although Unbiased purports to host a section for accountancy/tax services this will tend to be  restricted to grass roots UK Centric firms dealing with fairly prosaic  domestic tax issues for  the average Brit or small business .

The kind of advice and services you need will be delivered by Accountancy firms much higher up the 'food chain' , with large tax departments and staffed across multiple disciplines. This tends to be firms in the top 50 of rankings in the UK- see link below 

https://www.accountancyage.com/rankings/top-5050-accountancy-firms-2024/

 I am familiar with London firms such as Blick Rothenberg, Barnes Roffe, Buzzacotes, Menzies , Mercer Hole, Price Bailey etc, all of whom I believe have tax departments across a broad range of specialisms especially non dom matters.

Since you have established your firm's share scheme is a non approved arrangement, it sounds  as if you will be subject to relatively straight forward CGT on disposal based upon your proceeds less original cost. 

Whether you can avoid CGT along the lines you have posited, is where the specialist advice  and guidance comes in. Obviously this will come at a cost, so  you will have to judge the value of such advice relative to the quantum of tax you are trying to avoid. Remember your top CGT rate is just 24%, so somewhat below the top  rate on income.

DRS1

Not sure where your friend got 12 days from but you may want to read this and then dig a little more into the anti-avoidance stuff given your reason for leaving the UK
Leaving the UK - breaking tax residence - BDO

Tax on foreign income: UK residence and tax - GOV.UK contains something you can fill in to see whether you are UK resident or not in any year.  It may allow you play around to spot any traps

DRS1

babetak said:

@poseidon1 Thank you for your message. I would love to pay for professional advise and I already tried to find someone via Unbiased but I was very disappointed by the person who called me via that service as they did not seem knowledgeable at all. If you have any suggestions on how to best find a qualified professional for my situation, I would be most grateful. 

Also, I've posed the following question to my company: 

I understand that the company cannot provide tax advice, but I am in the process of finding a qualified tax adviser to assist me with matters related to the staff share scheme. To facilitate this, could you provide a clear explanation of the scheme that would be understandable to tax professionals? This would be invaluable in ensuring I find the right adviser. 

Their answer: 

The scheme is not an HMRC scheme as such, you simply own shares in a Private Limited Company, those shares have an inherent Base Cost which is essence what you paid for them and this is detailed on your Completion Statement and also the documentation for shares you have acquired through the Staff Share Scheme in recent times. 

Is this enough information to provide to the tax professional I will hire you think? 

Doubtful.

A share scheme generally has rules.  You should ask for a copy.  As mentioned on the other thread it would be a surprise if you were allowed to resign and keep the shares/interest in the shares under a typical employee share scheme. 

If there isn't really a scheme with rules and you have just bought actual shares in the company then you will need to get hold of the articles of association of the company and any shareholder agreement which applies (I would expect you to have been required to sign any such agreement).  Again I would expect one or other of those documents to deal with leavers (requiring them to sell their shares at a specified price which may not be market value depending on why they left).

When an employer invites an employee to participate in a share scheme they generally explain the tax implications - ie what are you taxed on and when.  You clearly expect the when to be October 2026.  Presumably that is based on something you have been told.  If it was in writing any tax adviser would want to see that.  You would though want to ask the adviser if you may be taxed in August 2025 instead if you resign (assuming there is any payout to pay tax on)