What should I do with my offshore investments when returning to the UK?
Returning to the UK: what to do with offshore investments
If you’ve been living overseas for many years and are now planning to return to the UK to retire, one of the biggest financial questions you’ll face is what to do with your offshore investment accounts.
“What should I do with my offshore investment accounts?”
This is not something to leave until the last minute.
Why?
Because returning to the UK brings you back into the scope of HMRC, and the UK tax system doesn’t always treat offshore investment accounts kindly.
In this article, I’ll explain in plain English how UK tax rules treat offshore accounts and investments when you move back, how the new FIG regime changed things from April 2025, and the practical steps you should take to protect your wealth.
Rule 1: Start Planning Early (Ideally a Year in Advance)
Most tax and financial planning professionals agree: you should start preparing your offshore investment accounts at least one full UK tax year () before moving home.
Why so early?
- Complex paperwork: Closing, restructuring, or endorsing offshore accounts can take months.
- Unpredictable delays: Proof of ID, cross-border paperwork, and asset sales can slow things down.
- Tax year timing: Acting in the wrong tax year could mean losing valuable reliefs.
Download The Returning Expat Financial Checklist to see exactly what you need to prepare before you move.
Why Offshore Investment Accounts Can Be a Problem on Return
When you’re living abroad, you may have built up offshore accounts and investments in places like the UAE, the Channel Islands, or the Isle of Man, often with tax advantages in those jurisdictions.
These could include:
- Offshore bonds or savings plans
- Personal Portfolio Bonds (PPBs)
- Managed investment portfolios
- Multi-currency bank and brokerage accounts
Once you become UK tax resident again, HMRC will usually tax your worldwide income and gains, including earnings and profits from offshore investment accounts.
New Rules
From April 2025, if you’re returning to the UK after at least 10 years abroad, you may qualify for the new 4-year FIG regime.
This means you won’t pay UK tax on offshore income and gains in your investment accounts for your first four years back, provided the funds remain offshore.
The 5-Year Rule
Even with offshore investment accounts, the Temporary Non-Residence Rule can apply.
If you return to the UK within 5 full tax years of leaving, HMRC may tax certain gains or income made while abroad, even if they were inside your offshore accounts.
If you’ve been away for more than 5 years, this rule no longer applies, but planning the timing of withdrawals and asset sales is still crucial.
🔗 Learn more about how the UK Temporary Non-Residence Rule works
Offshore Investment Bonds and Personal Portfolio Bonds
Offshore Investment Bonds
These are common in offshore investment accounts. They allow tax deferral while you’re abroad, but in the UK, withdrawals are taxed as income.
Strategies to reduce the impact include:
- Top slicing relief — spreading the gain over the years you’ve held the bond.
- Time apportionment relief — taxing only the UK-resident portion of the gain.
Personal Portfolio Bonds (PPBs)
These structures give a wide investment choice. However, if they hold non-HMRC permitted assets, you could face an annual tax charge based on a “deemed gain”, even if you’ve made no withdrawals.
Endorsing the bond before you return can avoid this, but it usually requires selling non-compliant assets in advance.
Should I Cash In My Offshore Investment Accounts Before Returning?
Not always. It depends on:
- Your tax position now vs. after your return
- Whether you’ll qualify for the 4-year FIG regime
- Your plans for the funds (UK vs offshore use)
Under the old rules, many expats cashed in accounts before moving back to avoid UK tax.
Under the new FIG rules, it may be more tax-efficient to wait, as long as the money stays offshore.
Case Study: Michael and Sarah’s Return from Dubai
Michael (64) and Sarah (61) had been living in Dubai for just over 20 years. Michael worked in the oil & gas sector, earning a high, tax-free salary. Sarah had run a small consultancy business catering to other expats.
Over the years, they’d accumulated a range of offshore investment accounts and assets designed to make the most of Dubai’s tax environment:
- A $400,000 offshore investment bond (held in USD) containing a mix of global equity funds, fixed-income funds, and structured notes.
- A buy-to-let apartment in Dubai generating $2,500 per month in rent.
- USD and GBP cash accounts in the Isle of Man for short-term liquidity.
- A small share portfolio in an offshore brokerage account.
After two decades in the Middle East, they decided it was time to return to the UK, specifically to Devon, to be closer to family and enjoy a quieter retirement.
They targeted a return date of mid-2026.
Step 1: Reviewing FIG Eligibility
Because they had been non-UK residents for more than 10 consecutive tax years, they would be eligible for the 4-year FIG regime starting in April 2025.
This meant that for their first four UK tax years after returning, they wouldn’t pay UK tax on offshore income or gains, as long as the funds remained offshore. This shaped much of their planning.
Step 2: Dealing with the Offshore Investment Bond
Michael and Sarah’s $400,000 offshore bond was in good shape from a performance perspective, but it contained some “non-HMRC permitted” investments. If brought back to the UK without changes, it could be hit with an annual “deemed gain” tax charge.
Action taken:
- 12 months before moving, they sold down the non-compliant investments and replaced them with HMRC-approved assets inside the bond.
- This avoided any potential annual tax charge once they were back in the UK.
- Because they qualified for the FIG regime, they planned to take withdrawals from the bond gradually over four years while keeping the proceeds offshore, effectively enjoying them UK-tax free during that period.
Step 3: Selling the Dubai Apartment
The apartment had been a solid investment but would have been subject to UK capital gains tax (CGT) if sold after their return.
Action taken:
- They listed and sold the apartment in late 2025 while still tax-resident in Dubai.
- This avoided UK CGT entirely and saved them an estimated £30,000 in potential tax.
- The proceeds were kept in their Isle of Man account to be used gradually after returning.
Step 4: Managing Currency Risk
With most of their wealth in USD, they faced the risk that the exchange rate could move against them before or after their return.
Action taken:
- They converted their USD cash into GBP in stages over 12 months.
- This smoothed out the effects of exchange rate fluctuations and ensured they wouldn’t be caught converting a lump sum at a poor rate.
Step 5: Deciding Which Accounts to Keep
Michael and Sarah had a mix of offshore investment accounts, some of which they decided to maintain after returning to the UK. Because of the FIG rules, they could continue to hold and grow these accounts without UK tax for four years, as long as they didn’t remit the funds.
Action taken:
- Retained the offshore bond and the Isle of Man bank account.
- Closed a small, high-cost offshore investment platform and consolidated the assets into their main offshore bond for simplicity and lower fees.
The Outcome
By starting planning a full year before their return, Michael and Sarah achieved:
- £30,000+ in CGT savings by selling property before UK tax residency.
- Full FIG regime benefits for four years, allowing them to manage their offshore investments without immediate UK tax.
- A compliant offshore bond structure that avoided annual deemed gain charges.
- Reduced currency risk through staged conversion.
- Simplified and consolidated investment arrangements ahead of their return.
They moved back to Devon in 2026 with a clear, tax-efficient income plan and the flexibility to decide later whether to bring more funds into the UK after the FIG period ended.
FAQs About Offshore Investment Accounts and Returning to the UK
I’ve been abroad for over 15 years, do I still need to worry about tax on my offshore accounts?
Yes, unless you qualify for the FIG regime. Once you’re UK tax resident again, offshore income and gains become taxable, unless you’re within the FIG exemption period.
Is it better to move my offshore accounts into a UK ISA or pension?
It can be, but only once you’re UK resident again. You can’t add to ISAs or pensions while non-resident.
Will HMRC know about my offshore investment accounts?
Yes. Over 100 countries share account details with HMRC under the Common Reporting Standard.
Should I cash in my offshore accounts before I return?
Not necessarily. With the FIG rules, you might be better off waiting if you qualify and can keep funds offshore.
Can I keep my offshore accounts after I return?
Yes, but whether that’s a smart move depends on the UK tax treatment and your plans for the funds.
What is a chargeable event?
A taxable moment that usually arises when withdrawing from an insurance-based investment product like an offshore bond.
Can I assign my offshore bond to my spouse?
Yes. If done correctly, this can reduce tax when withdrawing.
What is top-slicing relief?
It spreads gains over the years you’ve held a bond, potentially reducing your tax rate.
Can I offset UK losses against offshore gains?
Sometimes, but only for gains made while you’re UK resident.
What are the FIG rules?
From April 2025, if you’ve been abroad for 10 years, you can avoid UK tax on offshore income and gains for four years, provided the funds remain offshore.
📚 Further Reading
🔗 Coming Home: 10 Financial Steps for Expats Returning to the UK
🔗 Moving Back to the UK? Here’s What the New Tax Rules Mean for You
🔗 Planning to Return to the UK? How the 2025 IHT Changes Could Affect Your Estate
💡 Final Thoughts
Offshore investment accounts can be valuable wealth management tools for expats, but when returning to the UK, they can also be tax traps if not managed correctly.
My 3 rules are:
✔️ Plan early
✔️ Check FIG eligibility
✔️ Get advice from a cross-border financial planner
If you’re considering a return to the UK, I can help you understand your options and avoid unnecessary tax on your overseas investments.
Ross is a qualified Chartered Financial Planner and Pension Transfer Specialist.
He has been a cross-border financial adviser for 25 years and specialises in helping British expats manage their finances with clarity and peace of mind.
If you would like to have a no strings chat with him, please get in touch.
