Can you move a UK company overseas? Residence and exit-tax issues

Reviewed 20 October 2026

A director's move overseas does not automatically make a UK company non-resident. Personal residence, the company's domestic tax residence and its position under a double-tax treaty are separate questions. Start with those questions before assuming that profits will cease to be taxed in the UK.

UK incorporation is the starting point

Under Corporation Tax Act 2009, section 14, a UK-incorporated company is generally UK resident, subject to the statutory exceptions. Moving its owner, meetings or correspondence abroad is therefore not enough by itself to remove UK residence.

For companies incorporated abroad, central management and control is also relevant. HMRC considers where the company's real business is directed. The location recorded in minutes is not a substitute for establishing who actually takes the key decisions and where that happens.

What can a treaty change?

A company can be resident in both countries under their domestic rules. Where the applicable treaty awards residence to the other country, section 18 can treat it as non-resident in the UK. Read the treaty applicable to the actual countries and period, including relevant modifications.

Do not assume every corporate tie-breaker is an automatic place-of-effective-management test. HMRC explains that many treaties use agreement between the competent authorities. For that type of clause, section 18 cannot simply be applied unilaterally: the required residence determination must be made. Other treaties retain an objective test. The wording and effective dates matter.

Leaving UK residence can itself trigger tax

TCGA 1992, section 185 can charge the company's unrealised gains when it ceases to be UK resident. Broadly, there is a market-value disposal and reacquisition immediately before and at migration. Certain assets are excluded. The charge is therefore not confined to cases where the company actually sells its assets for cash.

Illustration: if an asset within the exit-charge rules has a £100,000 tax cost and a £400,000 market value, migration can crystallise a £300,000 gain before considering applicable exemptions or reliefs. That is a gain calculation, not a statement of the Corporation Tax payable.

Plan the sequence before making changes

A useful review starts with a dated record of incorporation, decision-making arrangements, domestic residence in the destination and the treaty position. Map the assets and liabilities, obtain valuations where needed, and identify what business or assets remain connected with the UK.

The practical question is whether the intended structure works after considering residence, any necessary treaty determination and the cost of leaving the existing position. A foreign director or overseas board meeting should not be presented as a complete tax-planning solution.

For related reading, see our introduction to double-tax treaties. Check the date and current treaty text when using archived material.

Primary sources: Incorporation rule, INTM120040; Central management and control, INTM120200; Treaty non-residence, INTM120070; Exit charges, CG42370. Checked 20 October 2026.

About the author

The author of this article is our site Editor, Lee Hadnum. After qualifying a prize winner in the Institute of Chartered Accountants exams, he also went on to become a chartered tax adviser (CTA). He worked in Ernst & Young's Entrepreneurial Services department for a number of years before setting up his own tax planning practice. He is now a full-time tax author.