Profits & dividends after you leave the UK: important changes affecting anyone moving abroad and planning to return

HMRC has changed the tax rules for people who move abroad, take dividends while non-resident, and then return to the UK.

From 6 April 2026, any dividends you take while living abroad may be taxed when you come back to the UK, if you return within a certain time window.

This is a major tightening of the rules and removes what used to be a key exemption.

What counts as “temporary non-residence”?

You are considered temporarily non-resident if:

• You lived in the UK for 4 out of the 7 years before leaving; and
• You move abroad and become non-resident; and
• You return to the UK within 5 tax years

If all three apply, you fall into the temporary non-residence regime.

What does the new rule mean for your dividends?

Old rules (before 2026):

• If the company earned the profits after you left the UK, you could take dividends abroad without a UK tax charge on return

New rules (from April 2026):

• This protection has been removed
• Now, if you return to the UK within 5 tax years:

Any dividends you took while abroad will be taxed when you return.

It doesn’t matter:

• When the profits were earned
• Whether the company is UK or overseas
• Whether the profits arose from work you did abroad
• Whether the dividends were “disregarded” for tax while you were away

If you’re temporarily non-resident, the UK will tax the dividends in the tax year you come back at the rate prevailing at that time.

When are you NOT affected?

You are protected only if you stay non-resident for more than 5 full UK tax years. Because departure and return years often split, this usually means being physically abroad for at least 3 years and several months.

Why is this important?

You may think: “I’m non-resident - so dividends aren’t UK taxable”, “These profits were earned while I was abroad”, or “My dividends were ‘disregarded income’ so no tax applies”.

Under the new rules, all of these assumptions could now be wrong. A large tax bill may arise in the year you return - often pushing clients into higher or additional rates.

Simple example & outcome 

You move abroad in April 2026. In 2027 you take a £200,000 dividend while non-resident. You return to the UK in July 2028 (within 5 tax years). That £200,000 dividend will be taxed by the UK in the 2028/29 tax year - even though you took it while abroad and even though no tax applied at the time.

What should you do now?

• Speak to us before moving abroad or taking dividends
• Model your timeline - departure date, residency status, and return date
• Plan profit extraction carefully before leaving the UK
• Avoid taking dividends while overseas unless you intend to stay abroad long-term
• Keep your accountant informed of your travel plans and company profit history

If you plan to move abroad but expect to return within a few years, speak to us before taking any dividends, re-entry planning is now just as important as exit planning. You can contact one of our International Tax experts here.