From Australia to the UK: Our top tips for your relocation 

For those transitioning from Australia to the UK, a well-structured plan is vital, particularly when navigating tax and legal complexities.

Plan ahead

It’s advisable to consult with experts in both Australia and the UK a minimum of one year prior to your relocation. Be aware that the differing tax years in the UK (6 April to 5 April) and Australia (July 1 to June 30), can have implications for your tax residency.

The start of your UK tax residency is consistently the 6 April prior to your arrival, even if that’s in the middle of a tax year. In certain cases, you may be eligible for ‘split-year treatment’, which can offer tax relief on income or gains earned while still overseas.

What to do before you leave Australia

It’s important to file a final tax return in Australia before departure indicating change of residency, along with keeping records of all assets and their values on the date you leave Australia.

If you become a non-resident, you’re deemed to have disposed of your Capital Gains Tax (CGT) assets (except Australian real property) which could trigger a CGT event. You can elect to defer this CGT until you dispose of your assets, but it must be declared.

These, along with many other considerations, highlight the importance of having advisers in both countries that are working together from the outset to ensure cohesive guidance and prevents potential conflicts. At Gerald Edelman, we frequently collaborate with Australian advisers Azure Group to assist clients moving to the UK. Whether you wish to continue working with your current adviser or require recommendations, we can connect you with tax and legal professionals through our extensive network.

Immigration and tax considerations

Your immigration status and UK residency basis should be reviewed carefully. Although the UK has separate tax and immigration systems, they are closely linked. For example:

• Visa matters: Your visa type (e.g. Skilled Worker, Investor) can influence your tax obligations and potential reliefs.
• Residency misalignment: You may be classified as a UK tax resident before physically relocating or securing a visa.
• Long-term impact: Some visas provide pathways to permanent residency or citizenship, which carry important tax consequences.

Understanding these intricacies is essential for strategic tax planning and compliance.

Rules effective as of April 2025

Previously, the concepts of residence and domicile are interlinked in UK tax law. However, now domicile is no longer be relevant, and taxation is purely residency-based.

Therefore, it’s important to understand when you became a tax resident (i.e. before or after 5 April 2025) and what your tax obligations are.

Double Taxation Agreements (DTA)

You could be considered a tax resident in both Australia and the UK at the same time, which may result in the same income being taxed in both jurisdictions.

To mitigate this, a Double Taxation Agreement (DTA) exists between the UK and Australia. This agreement helps determine which country has taxing rights over your income and ensures you don’t pay tax twice. Our team can help navigate this based on your individual circumstances.

Preparing before you move

Familiarising yourself with UK tax laws is essential, particularly in relation to your income, assets, and financial holdings. Before you become a UK resident, consider these key steps:

• Optimising pre-arrival ‘clean capital’ – ensuring funds derived from pre-UK residency income or gains remain tax-free when brought into the UK.
• Structuring offshore bank accounts – keeping clean capital separate from post-arrival non-UK income or gains.
• Rebasing assets – adjusting asset values before UK residency to reduce future CGT liabilities.
• Reviewing investments, business interests, trusts, and offshore structures – assessing whether restructuring is needed ahead of your move.

If you have already relocated to the UK prior to 5 April 2025, it’s important to explore how these recent changes could affect your position and present new opportunities.

Employment income is subject to UK tax if any part of the duties is performed in the UK, regardless of where the employment is based.

Property in the UK

• Be aware of potential Inheritance Tax and ensure remittance basis users don’t accidentally remit taxable foreign income or gains when bringing funds into the UK.
• Consider renting first to explore locations, avoid the 2% overseas buyer surcharge and understand UK leasehold complexities, especially financing and ground rent issues before committing to purchase.
• If you retain property in Australia and plan to rent it out, you may still have tax obligations in Australia. Rental income may also be subject to UK taxation.
• Have a Will in place to cover worldwide assets, including those in Australia and the UK. UK residents should consider a UK-specific Will and be aware of Inheritance Tax implications in both countries for effective estate planning.
• Australian superannuation funds may be taxed in the UK depending on residency, fund type, and withdrawal conditions.

How can Gerald Edelman help?

Navigating the UK tax system can be complex, and consulting an  international tax specialist can provide clarity. We can help optimise your tax position and ensure full compliance with UK regulations.

If you’re planning to move to the UK and would like further advice, please contact our team by submitting a form, or emailing our International Tax Partner, Sonal Shah.