Arrivals and departures for capital gains tax: the UK in international context

This article argues that the UK’s approach to taxing capital gains in the presence of international mobility is anomalous among its international peers, and should be reformed. Using a reference group of 21 comparator jurisdictions, we classify the main models for taxing individuals who arrive in, and depart from, a country for CGT purposes. On arrivals, we distinguish regimes that tax the pre-arrival gains of immigrants in full, preferential regimes for foreign gains, and ‘rebasing on arrival’ (ROA). On departures, we compare ‘deemed disposal on departure’ (DDD), ‘tails’ and other hybrids shaped by EU law, and the UK’s temporary non-resident regime. Our preferred model combines ROA with DDD: exempting pre-arrival gains while ensuring that gains accrued during UK residence are taxed on departure. We argue that ROA-DDD would be feasible within the UK’s existing treaty framework and offers an opportunity to shift towards an improved global equilibrium for the taxation of capital gains when individuals migrate.