Autumn Budget 2025 Introducing 20% Exit Tax on Wealthy Individuals Leaving the UK?

For the coming Autumn Budget 2025, the UK government is reportedly considering introducing a new “settling-up charge” that would require wealthy individuals leaving the country to pay a 20% tax on certain assets. The proposal, said to be under review by Chancellor Rachel Reeves, is intended to align the UK with similar measures already in place across most G7 nations.

According to reports, the tax could raise around £2 billion in additional revenue for the Treasury. The charge would target business assets such as shares and investments that currently fall outside existing capital gains tax (CGT) rules once an individual relocates abroad.

Why Is the Government Considering This Tax for the Autumn Budget 2025?

Currently, British citizens who move overseas remain subject to a 20% Capital Gains Tax on UK property and land valued above £6,000. However, other assets like shares in certain companies can be sold tax-free after departure. This loophole effectively allows individuals relocating to low-tax jurisdictions to avoid paying CGT on substantial gains.

Under the new “settling-up charge” being explored, a 20% tax would be levied on the value of these assets at the time an individual exits the UK. Treasury officials are reportedly modelling this and several other potential tax reforms ahead of the coming Budget.

The UK remains an exception among major economies in not imposing such an exit charge. Similar rules exist in several G7 countries, where taxes are triggered when residents transfer their assets or change tax residency to another country.

Would This Be Good or Bad for the UK Economy?

Analysts suggest that the measure could close existing loopholes and discourage abrupt tax-motivated relocations. By taxing unrealised gains upon departure, the Treasury aims to ensure fair contributions from high-net-worth individuals who benefited from the UK’s economic environment before leaving.

However, experts have cautioned that announcing such a policy without immediate implementation could lead to capital flight, as individuals rush to move assets or change residency before the tax comes into effect. Policymakers may need to design the measure in a way that minimises this risk, possibly through immediate enforcement or transitional arrangements.

Potential Deferral & Complementary Policies

Reports indicate that the proposed scheme might include provisions allowing individuals to defer payment for several years if they choose not to liquidate their assets immediately. This flexibility could help ease liquidity pressures for departing taxpayers, particularly those with long-term investments or private business holdings.

It is also understood that the “settling-up charge” could be introduced alongside a complementary policy exempting capital gains accrued before individuals arrive in the UK. Such a balance would aim to create a fair and symmetrical system and ensure that new global investors are not penalised for past gains while still holding those who benefited from the UK’s system accountable when they leave.

Will This Proposal Be Implemented Soon?

The Treasury has not yet confirmed the proposal or commented publicly on its details. Officials have indicated that several tax options are being modelled ahead of the Budget, and no final decisions have been made.

If implemented, the policy would represent one of the most significant reforms to capital gains taxation in recent years. It could strengthen the UK’s fiscal position while signalling a shift toward international norms on exit taxation, though it will likely face scrutiny over its potential impact on investment mobility and the UK’s global competitiveness.

Conclusion

While still at the consideration stage, the proposed “settling-up charge” marks a notable step toward rethinking how the UK approaches tax fairness in an increasingly globalised economy. By targeting unrealised gains of individuals who choose to relocate abroad, the measure seeks to prevent wealth migration from eroding the domestic tax base.

As the government weighs its next fiscal steps, much will depend on how such a policy is designed and communicated. A carefully balanced framework could help protect revenues while maintaining investor confidence.