What should I do with my offshore investments when returning to the UK?

When it comes to preparing your offshore investments for a return to the UK, the most important thing is to ensure you start planning as early as possible.

Most tax specialists recommend that you should ideally give yourself at least a full UK tax year between deciding to move home and actually making the move. 

Aside from the obvious reason of being well prepared, the reason for starting the planning so far in advance is that things rarely run smoothly. 

Depending on the complexity of your financial situation you will find that restructuring your finances can take significantly longer than you might expect – especially if you have lived outside of the UK for a long time.

Returning to the UK  – Key considerations

  1. If you become a tax resident of the UK without careful planning, your worldwide financial assets could be subject to UK tax rules as well as local tax rules, meaning you could be hit with an unnecessarily large tax bill.
  1. If you return to the UK within 5 years of moving overseas, according to HMRC: “you may have to pay tax on certain income or gains made while you were non-resident”. More detail on this can be found on the HMRC website.
  1. If you have acquired assets while resident in jurisdictions such as the UAE, you may be able to completely avoid CGT if they are disposed of before you become a UK resident again.

However, once you become a UK resident, your entire gain from this disposal may be liable to UK CGT. 

Regardless of your time offshore, returning to the UK with unrealised gains may not be in your interest.

Follow-Up Question #1: Do I pay more tax on my offshore policies when I am back in the UK?

Yes, in some cases certain policies need to be changed so they don’t incur an additional tax hit. 

With Personal Portfolio Bonds, for example, these policies need to be endorsed and in order to endorse them, you will need to sell down any assets that are not approved by HMRC.

Follow-Up Question #2: Should I cash in my offshore policies once I am back in the UK?

It is crucial to have a cross-border expert review your policies prior to encashment. 

A full or partial surrender would be classed as a chargeable event, and as such income tax will be due on the amount which is withdrawn. 

However, if you were to access the proceeds differently, the tax is only due on the gains. 

You can also use time apportionment relief and top slicing to further mitigate any tax bill.

Talk about it

Are you planning to return to the UK in the next 12-18 months?

To find out how we can help you develop a strategy that minimises the risk of any nasty surprises, get in touch. Email contact@rossnaylor.com.


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About Ross

▪️Ross has been a financial adviser for the past 26 years.

▪️He specialises in working with British expats over age 50 who are looking to optimise their finances for retirement.

▪️He is qualified as a financial adviser both in the UK, as a Chartered Financial Planner®, and in the EU, as a European Financial Planner®.

▪️Ross has been an expat himself for 22 years and currently lives in Warsaw, Poland with his wife and 2 children.