Temporary non-residence: tax when you return to the UK
Temporary non-residence rules can tax certain gains and income from your time abroad when you return. They generally apply to an absence of five years or less if the earlier residence test is met.
Information only. Not tax, legal or financial advice.
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By Flight Risk Capital. Published: . Last updated: .
Who falls within the five-year rule?
The rules look at your tax residence before leaving, during the absence and on return. HMRC’s current starting test requires sole UK residence for all or part of at least 4 of the 7 tax years before the year of departure, followed by a relevant absence of 5 years or less.
Sole UK residence means UK residence without being treated as resident elsewhere under a tax treaty for that period. The statutory residence test guide is the starting point for working out UK residence.
Exactly five years is still within the rule. HMRC says the relevant period must exceed five years for these special rules not to apply. Its Residence and FIG Regime Manual RFIG21510, updated 3 July 2026, supplies these tests. A flight date alone does not establish the period.
Which capital gains can be taxed on return?
Gains and relevant losses on assets held before departure can be brought into the tax year of return. That can include a sale made while you were non-resident, even if the sale proceeds stayed overseas.
An asset bought and sold during the absence is normally excluded. Exceptions include certain transfers under rules that defer a gain, rollover relief and gains tied to an earlier asset. HMRC’s HS278, updated 6 April 2026, explains these exclusions and exceptions.
UK land and property can already be taxable while you are away. Read the non-resident CGT guide for that separate charge and its return deadline. Do not assume that paying it settles every possible charge on return.
Which income can be brought back into charge?
HMRC lists specified pension payments and lump sums, distributions from closely controlled companies, written-off shareholder loans, life-policy chargeable event gains and offshore income gains. The rules also cover certain employment reward arrangements and foreign income remitted by former remittance-basis users.
A chargeable event gain is a taxable gain under rules for products such as life insurance policies. Offshore income gains arise under particular offshore fund rules. These categories have their own conditions. The rule does not simply turn every overseas receipt into taxable income.
The amounts caught are treated as arising in the period of return. HMRC sets out the categories in RFIG21560, manual updated 3 July 2026.
What changed for company dividends in April 2026?
For returns from 6 April 2026, the affected dividend or distribution includes profits earned during the absence. The earlier exclusion for dividends from post-departure trading profits no longer applies.
The rule concerns close companies, broadly companies controlled by a small group, and qualifying shareholders or their associates. It can cover UK and overseas companies. RFIG21600 explains the ownership conditions and foreign tax credit claim. Do not apply it to every ordinary portfolio dividend.
Can a pension withdrawal trigger a return charge?
Yes. Certain relevant withdrawals from registered UK pensions and relevant overseas schemes are caught where the applicable total exceeds £100,000 during the absence. The charge can apply to the full affected withdrawal, rather than just the excess. The exact payment categories matter.
This threshold and treatment come from Employment Income Manual EIM75450, updated 21 October 2026. Read the pension abroad guide before drawing money and the QROPS guide for transfer charges, which have separate rules.
How do split years affect the dates?
A residence period can be a whole tax year or a UK or overseas part of a split year. The relevant absence starts after the last period of sole UK residence ends and stops before the next such period begins. These boundaries can fall within a tax year.
Use the SA109 and split-year guide to connect the residence result with your return. Keep residence dates and records of asset purchases, disposals, distributions and withdrawals with the moving abroad checklist.
See the Budget tracker for announcements and effective dates.
What else do readers ask?
Is exactly five years abroad enough to avoid the rules?
No. HMRC says the relevant period must exceed five years. The earlier residence conditions also matter (RFIG21510, manual updated 3 July 2026).
Does the rule cover everything I earned abroad?
No. It brings specified income and gains into the return period. It is not a blanket charge on all overseas receipts.
Are assets bought after leaving always excluded?
No. Buying and selling an asset during the absence normally keeps its gain outside this charge, but rollover and connected transfer rules can create exceptions.
Does split-year treatment avoid temporary non-residence?
No. The overseas and UK parts help set the relevant period. A charge can still arise in the UK part of the return year.
Where can I explore this further?
Full sourced leavers tracker. Articles and tracker roundups.
Sources
- HMRC: Residence and FIG Regime Manual RFIG21510: temporary non-residence, .
- HMRC: Residence and FIG Regime Manual RFIG21540: start and end dates, .
- HMRC: Residence and FIG Regime Manual RFIG21560: tax on return, .
- HMRC: HS278: Temporary non-residents and Capital Gains Tax (2026), .
- HMRC: Residence and FIG Regime Manual RFIG21600: closely controlled companies, .
- HMRC: Employment Income Manual EIM75450: pension temporary non-residence rules, .