Autumn Statement 2025 | Expert Insights
Response on Temporary Non-Residence Rules
Somewhat hidden in budget press releases was a significant change to the Temporary Non-Residence Rules (TNR), specifically rules relating to dividends paid to non-UK tax residents from close companies. Currently individuals who returned to the UK after a temporary period of non-residence (broadly five years or less) would, along with certain other sources of income and gains, be taxed on dividend income in the year return. An important exception to this was dividends paid out of ‘post departure trade profits’; such dividends would not be taxed in the year of return, even if the individual had resumed tax residency with five years. The new proposals will, from 6 April 2026, remove the exclusion for the post departure trade profits, resulting in all dividends being taxed in the UK in the year of return at the prevailing rate of tax. This has been described as closing a ‘loophole’, although it was never a loophole as such, but an intended consequence of the legislation when it was first introduced in 2013. This change could have important consequences for anyone who has left the UK who is caught by the TNR – such individuals will need to carefully review their circumstances to avoid a surprise tax liability.
Adam Bonell Private Client Partner HW Fisher
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