How does the UK Autumn Budget 2024 affect people planning to move to the UK?

In the wake of the UK Autumn Budget announcement in October 2024, expats looking to move to the UK asked us questions about the impact of currency fluctuations, the coming changes to non-dom status, tax implications for retirement funds and more.

In our recent webinar analysing the impact of the budget on expats, we put people’s questions about moving to the UK to our panel of tax, financial management and currency experts to find out the most important things you need to know.

Tax changes for expats moving to the UK

Foreign income and gains (FIG) regime

If you’re coming to the UK for the first time and you have not been a UK resident in any of the previous 10 years, all of your foreign income and gains will now be exempt from UK tax for the first four years of living in the UK.

It is important to note that the foreign income and gains (FIG) regime will need to be claimed via your tax return. In the same way as the previous remittance basis, if you are looking to exempt your foreign income and gains from UK tax, you will lose your entitlement to:

• The personal allowance
• The capital gains tax annual exemption
• Any relief on foreign losses you incur

Under the previous tax regime, if you were moving to the UK for the first time, you would have been considered a non-dom and able to access the remittance basis for tax – even if you had already been resident for a couple of years.

Now, if you’ve been a UK resident in any of the previous 10 years, from 6^th April 2025 you’ll be taxed on your worldwide income and gains when you move to the UK. There will not be any option for you to exempt your foreign income and gains from UK tax, because the new FIG regime can only apply if you have been non-resident for 10 years prior to your first year of UK residence.

The FIG regime may extend to someone who is straddling the old and new regimes if they have been resident in the UK for only a year or two, providing they have been non-resident for 10 years prior to arriving in or returning to the UK.

Overseas Workday Relief (OWR)

If you are coming to the UK to work, which many expats will be, you’ll be able to access Overseas Workday Relief (OWR) during the first 4 years you are UK tax resident.  

This means that if you are travelling overseas for work, you will be able to exempt your non-UK workdays from UK tax. This applies to your salary, share awards and bonuses.

The qualifying conditions for OWR will be similar to the FIG regime.

Both the FIG and the OWR can make your first four years in the UK very tax-efficient. 

Additional tax considerations for expats moving to the UK

• If you are looking to buy UK property, you’ll need to consider the fact that Stamp Duty Land Tax (SDLT) has increased. If you already own a property overseas, and you’re considering buying a UK property, you could be subject to a 5% surcharge on normal SDLT rates (this may not apply if you are replacing a main home overseas which you have sold).
• The lower rate of UK Capital Gains Tax (CGT) has increased from 10% to 18% and the higher rate has increased from 20% to 24%. The amount of CGT you will pay depends on your marginal rate of tax. The lower rate applies to any gains which fall within your unused basic rate tax band. If you are a higher rate taxpayer, any capital gains will be taxed at 24%.
• Moving to the UK does not change the classification of your overseas income or capital gains and assets do not get rebased to their current market value on the date you move to the UK. Therefore, you will need to think about pre-arrival planning, and whether you will need to restructure pre-arrival to rebase the value of your assets and establish clean capital before you come to the UK. In some cases, this planning can be done while in the UK if you are claiming tax exemptions under the FIG regime, but this will not always be appropriate due to the loss of your tax-free allowances.

We recommend seeking specialist advice to ensure your assets are in order from a tax perspective and that you fully understand the tax implications of coming to the UK.

Financial planning considerations for expats moving to the UK

In most cases, you can retain existing pensions in other countries when you move to the UK, and you won’t be taxed on them until you’re taking the benefits.

If you’re planning to remain in the UK for a significant amount of time, or planning to retire here, you will also need to consider the implications of your pensions and other assets being held in their existing currencies and in the country you have left.

For example, if you are moving to the UK from Canada, you might have a Registered Retirement Savings Plan (RRSP) which you’re holding in Canadian Dollars, or you might have tax-free savings accounts which are the smaller equivalent of UK ISAs.

In this case, you would need to choose whether you leave those assets where they are – in which case they would be treated as foreign assets for UK taxation reporting – or whether you re-plan them and bring them into the UK.

The four-year window of the FIG regime gives you plenty of time to assess all your assets and choose which ones you want to continue holding after your first four years in the UK, and which ones you may want to disinvest from.

Foreign exchange and currency considerations for expats moving to the UK

There was very little reaction in the currency markets to the UK budget, especially when compared to the mini budget from Liz Truss back in 2022 when we saw the Sterling fall to its lowest level since 1985.

To continue with the example of moving from Canada to the UK, post-budget the Pound has increased by 0.37% against the Canadian Dollar. This is certainly not significant enough to drive any decisions about whether to move to the UK.

However, if you look back a little further, the Pound has strengthened by nearly 6.5% against the Canadian Dollar in the last 12 months. For expats looking to bring assets into the UK, this demonstrates the importance of understanding the risk that FX volatility can have on the value of those assets.

It is also important to plan when and how you will move your assets to the UK. Again, using Canada as an example, when you are not in the country it is notoriously difficult to move funds abroad, because you are often required to be present in person when moving large amounts out of your bank account. This means you may end up needing to move smaller amounts of money over to the UK over a longer period.

Of course, every jurisdiction is different, and everyone will have different banking arrangements. This is why it’s important to understand your capabilities and limitations before you move country to avoid any nasty surprises or unanticipated stumbling blocks after you’ve moved to a new country.