Moving to the UK: The Tax Things Australians Actually Need to Sort Out

The UK has long been a magnet for Australians. Familiar enough to feel comfortable, different enough to feel like an adventure, and close enough to the rest of Europe that a long weekend in Lisbon becomes a genuine option rather than a fantasy. Cities like London throw off opportunity in finance, tech and the creative industries, and the whole place is small enough that you can actually see it.

The exciting bits take care of themselves. It’s the boring bits, the tax bits, that quietly decide whether your move is a financial win or an expensive lesson. And here’s the thing: the UK tax system has changed enormously in the last couple of years, so a lot of the “advice” floating around online is now flat wrong. Let’s walk through what actually matters, from an Australian’s point of view.

First, two countries will be interested in you

The single most important idea to hold in your head is that moving overseas doesn’t automatically switch off the Australian Tax Office. Your Australian tax position is driven by your Australian tax residency, which is a separate question from your UK residency, decided under Australia’s own rules. It’s entirely possible to be tax-resident in both countries at once, at least for a while, which is exactly the kind of mess the Australia-UK tax treaty exists to sort out.

So before you get lost in UK detail, get your Australian residency position straight first. We cover that in our guide to becoming a non-resident for Australian tax purposes, and it’s the foundation everything else sits on. Get it wrong and you can come home years later to a nasty surprise.

Leaving Australia can trigger an exit tax

Before the UK even gets warmed up, Australia may have a parting gift. When you cease Australian tax residency, CGT event I1 can treat you as having disposed of many of your non-Australian-property CGT assets at their market value on the day you leave. Shares, managed funds, ETFs, crypto, foreign assets, the lot can come into the calculation, even though you haven’t actually sold anything.

You can generally choose to disregard that deemed gain or loss, but the trade-off is that those assets stay inside the Australian CGT net until you actually sell them or become an Australian resident again. In plain English: you can sometimes defer the bill, but Australia keeps your forwarding address. Which option is better depends on your assets and your plans, so it’s one of the key things to model before you go. Once the plane has taken off, the result is usually less flexible and more expensive.

Your Australian home can be a quiet tax grenade

If you keep your Australian home and rent it out while you’re in the UK, do not assume the old “six-year rule” will automatically save you from capital gains tax.

The six-year absence rule can still be powerful if you sell while you’re an Australian tax resident and the usual conditions are met. But if you sell while you’re a foreign resident, the main residence exemption is generally denied altogether, unless a narrow life-events test applies (broadly: terminal illness, the death of a spouse or minor child, or a relationship breakdown, within six years of becoming a foreign resident). That can mean Australian CGT across the whole post-1985 ownership period, even if the place was your actual home for years. The contract date of the sale, and your residency on that date, decide the outcome. We dig into this in our guide to the main residence exemption and the six-year rule for expats, and it’s one of the nastiest traps in the system.

When do you become a UK tax resident?

The UK works this out using the Statutory Residence Test (SRT), in force since 6 April 2013, which replaced the old “vibes-based” approach with something more concrete. It’s a three-step test, and you work through it in order, stopping as soon as you get a definitive answer:

First, the automatic overseas tests. If you spend very few days in the UK (broadly fewer than 16 if you were UK-resident in any of the previous three tax years, or fewer than 46 if you weren’t), or you work full-time abroad with limited UK presence, you’re automatically non-resident, and you can stop there.

Second, the automatic UK tests. These can make you UK resident if, for example, you spend 183 days or more in the UK in the tax year, you meet the detailed “UK home” test, or you work full-time in the UK over the relevant period. The home test isn’t simply “I rented a flat in London,” it has timing and overseas-home conditions attached, so it’s more technical than it looks.

Third, if neither of those settles it, the sufficient ties test. This counts your connections to the UK (a UK-resident spouse or minor child, available UK accommodation, UK work, having spent 90-plus days here in either of the two prior years, and whether the UK is where you spend the most days) and weighs them against your day count. The more ties you have, the fewer days you can spend before you tip into residency. It’s a sliding scale, not a single magic number, and the “you can always do 90 days” line you’ll hear at the pub is a myth.

One more thing that matters enormously in the year you actually move: split-year treatment. Under the SRT you’re technically resident or non-resident for a whole UK tax year, but in certain arrival and departure cases the year can be split into a UK part and an overseas part, so you’re only taxed as a UK resident from your arrival. A UK tax day is generally any day you’re in the UK at midnight, and the UK tax year runs 6 April to 5 April, not the Australian 1 July to 30 June, which catches people out constantly. The full detail lives in HMRC’s guidance on the Statutory Residence Test, and given how the day-counting and the ties interact, this is an area worth getting checked rather than eyeballed.

Does the treaty sort out dual residency?

If both countries treat you as resident under their own rules, the Australia-UK double tax agreement may apply a tie-breaker. That usually looks at where your permanent home is, your centre of vital interests, your habitual abode, and ultimately your nationality. Helpful? Yes. Magic? No.

The important technical point: a treaty tie-breaker generally decides where you’re resident for the treaty’s purposes. It doesn’t automatically rewrite your domestic-law residency or wipe out the other country’s reporting and filing obligations. Treaties prevent double taxation. They don’t tuck you into bed and do your paperwork.

The big change nobody told you about: the end of the old non-dom regime

Here’s the update that rewrites most of the older advice out there. For years the UK had a special set of rules for “non-domiciled” residents, broadly letting some foreign income and gains stay outside UK tax as long as the money wasn’t brought into the UK (the “remittance basis”). For an Australian with investments, rental property or a business back home, that mattered enormously. That old remittance-basis world has now been replaced for income tax and capital gains tax.

From 6 April 2025, the UK introduced the four-year foreign income and gains (FIG) regime. If you become UK tax resident after at least ten consecutive tax years of non-UK residence, you may be able to claim the regime for your first four UK tax years, and during that window eligible foreign income and gains can be kept outside UK tax even if you bring the money into the UK. The old question was “did you remit the money?” The new question is “do you qualify, and are you still inside the four-year window?” Same pub, different bouncer.

Don’t overread it. The regime is claimed through Self Assessment, it doesn’t cover every kind of offshore receipt (foreign employment earnings are dealt with separately), and in any year you claim it you lose your UK personal allowance and your capital gains tax annual exempt amount. So it’s a calculation, not a freebie, and whether it’s worth claiming depends on how much foreign income you actually have. This is exactly the sort of thing to model with an adviser before your first UK tax return, not after. HMRC’s guidance on the four-year FIG regime sets out the conditions.

The other UK shift: inheritance tax now follows long-term residence

The same reform changed how UK inheritance tax (IHT) reaches your worldwide assets. The old domicile and “deemed domicile” approach was largely replaced from 6 April 2025 by a long-term-residence test. Broadly, once you’ve been UK tax resident for at least 10 of the previous 20 tax years, you become a “long-term resident” and your worldwide assets, including Australian ones, can fall within the UK IHT net, and a tail of exposure can continue for a period even after you leave.

For most newly arrived Australians this isn’t an immediate problem, but it’s the long game to keep in view: the first four years may be about income and capital gains, but stay long enough and inheritance tax becomes the bigger story. The UK tax system plays chess. Slowly. With expensive pieces.

What UK tax actually looks like once you’re resident

Once you’re a UK resident and past any FIG relief, the UK generally taxes your worldwide income, not just your UK salary. Your Australian rental income, dividends, interest and investment gains can all wander into the room.

For 2026-27, the headline income tax numbers for England, Wales and Northern Ireland are a £12,570 tax-free personal allowance, then 20% up to the higher-rate threshold of £50,270, 40% up to £125,140, and 45% above that. Two things Australians routinely trip over. First, the personal allowance is clawed back once you earn over £100,000, at £1 for every £2, so it’s completely gone by £125,140, which creates a brutal effective rate in that band. Second, money you keep in UK savings earns interest that’s UK taxable, so if you sell a house or receive an inheritance back in Australia and park the proceeds in a UK account, the interest those funds earn is in the UK net (subject to the savings allowances and how the FIG regime applies to you). The capital itself isn’t income, but what it earns can be.

Two footnotes worth knowing. Scotland sets its own rates and bands for most earned income, so don’t use the England table for a Scottish salary. And these thresholds are frozen until April 2031, which through the quiet magic of “fiscal drag” pulls more of your income into higher bands over time even though the rates never change. It’s the tax increase wearing slippers.

Your Australian super is not a UK piggy bank

Can you move your Australian super to the UK? Generally, no. Australian super is locked up by the preservation rules until you reach your preservation age (now 60 for anyone born after 30 June 1964) and meet a condition of release, such as retiring. Being in the UK doesn’t unlock it.

The one exception is the Departing Australia Superannuation Payment (DASP), and it’s not a “moving to the UK” cash-out button for Australians. It’s generally available only to eligible former temporary residents who worked in Australia, have left, and whose temporary visa has ceased. It is not available to Australian citizens, New Zealand citizens or Australian permanent residents. Where DASP does apply, it’s taxed harshly: the taxable taxed element is generally withheld at 35%, the taxable untaxed element at 45%, and working-holiday-maker components at a brutal 65%. The ATO explains the DASP rules in full. For Australians, the short version is that super usually stays in Australia until a normal condition of release is met.

Can you move a UK pension to Australia?

Sometimes. Carefully. With gloves.

A UK pension can generally only be transferred overseas without being treated as an “unauthorised payment” if the receiving scheme is a recognised overseas pension scheme. In Australia that usually means a complying super fund that meets HMRC’s conditions, and very few ordinary Australian retail or industry funds do, largely because Australian super can be accessed earlier than UK pension rules allow. In practice many Australian entries on HMRC’s list are purpose-built self-managed super funds.

And don’t assume that a fund appearing on HMRC’s notification list today guarantees a safe transfer tomorrow. HMRC says the list is based on scheme self-notifications and is not a guarantee, so the receiving fund’s status needs checking at the time of transfer. Tax planning by screenshot is how people become cautionary tales. The age rules matter too: from 6 April 2028 the UK’s normal minimum pension age is due to rise from 55 to 57, which makes the receiving fund’s deed and rules important rather than decorative.

Then there’s the Overseas Transfer Charge: a 25% UK charge can apply to a transfer unless an exemption is met. Broadly, a transfer to an Australian recognised scheme may escape the 25% charge where you’re genuinely tax-resident in Australia and the transfer is within your Overseas Transfer Allowance (around £1,073,100), with the charge applying to any excess. Try to send a UK pension to Australia while you’re still living in the UK and the answer can be very different. Same pension, different residency, different pain.

And then Australia gets a turn. A UK pension transfer into Australian super can trigger the Division 305 foreign-superannuation rules, applicable fund earnings, the section 305-80 choice, and contribution-cap problems. We unpack all of that in our guide to transferring a foreign pension or super to Australia. The short version: never move a pension across borders without advice on both ends first. This is genuinely one of the easiest ways to lose a quarter of your retirement savings to an avoidable charge.

Buying a home in the UK: mind the surcharges

If you buy residential property in England or Northern Ireland, you’ll pay Stamp Duty Land Tax (SDLT). (Scotland and Wales run their own versions, Land and Buildings Transaction Tax and Land Transaction Tax, with different rates, so check which country you’re actually buying in.)

SDLT is charged in bands on the slice of the price in each band. From 1 April 2025 the standard residential rates in England and Northern Ireland are nil up to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5 million, and 12% above that. Then come the surcharges:

• A 2% non-resident surcharge can apply if you’re treated as non-UK resident for SDLT purposes. Note that the SDLT residence test isn’t the same as the income tax Statutory Residence Test: broadly it looks at whether you were present in the UK for at least 183 days in a continuous 365-day period around the purchase. If you’re treated as non-resident at the time but later meet the test, you can usually claim the surcharge back.
• A 5% additional-property surcharge (up from 3% in October 2024) can apply if you already own another residential property anywhere in the world, including back in Australia, unless a replacement-main-residence exception or another relief applies. So your Aussie home can make your UK home more expensive even if it’s your only UK property.

Stack those up and an overseas Australian buying a UK home while still owning property back home can be paying the standard rate plus 2% plus 5%. On a serious London price tag, that’s not a footnote, it’s the deposit on a very respectable car. The gov.uk SDLT rates page has the current detail and a calculator.

The bottom line

Moving to the UK is a brilliant adventure, and the tax side is entirely manageable once you stop relying on out-of-date pub wisdom. The trick is lining up both countries before you go. On the Australian side, work out when you cease tax residency, model the CGT exit event, and think hard about your Australian home before you rent it out and fly off. On the UK side, understand that the old non-dom shortcut is gone, the four-year FIG regime is a calculation rather than a freebie, inheritance tax is the long game, and pensions and property purchases are where the big, avoidable money is lost.

The UK can be a fantastic move. Just don’t treat the tax as admin to sort out later. Later is when the options have packed up and left.

Heading to the UK with an Australian tax tail?

We’re Australian tax specialists, so our lane is your Australian side: your residency position, the CGT exit rules, what happens to your Australian property, shares and super, and how it all interacts with your move. For the UK-specific detail you’ll also want a UK-qualified adviser, and we’re happy to work alongside one so nothing falls through the gap between the two systems.

Book an appointment with our expat tax specialists today, ideally before you board the plane. A bit of admin now saves a world of bother later.

General information only. This article doesn’t consider your personal circumstances and isn’t tax or financial advice. It describes aspects of UK tax law for general context only; UK rules are administered by HMRC and you should confirm your UK position with a qualified UK adviser. Australian and UK tax outcomes depend on your specific circumstances, your residency in each country, your timing, and the Australia-UK tax treaty, and figures and thresholds change over time. Some measures referred to are subject to future change. Speak to our specialist expatriate tax team today, or with another registered tax agent, before acting.