The Duke and Duchess of Sussex’s reported return to Britain has prompted claims that the couple have picked the perfect moment to move for tax reasons, but a specialist has warned there is “no magic date in August” that allows anyone to come home without facing UK tax.
Harry and Meghan are expected to set up a private home outside London while keeping their properties in California and Portugal. Arriving partway through the tax year could offer some advantages, but Molly Monks, an insolvency specialist at Parker Walsh, said the move was far from a simple tax masterstroke.
“There is no magic date in August that allows someone to return to Britain without facing UK tax,” she said. “The rules consider how many days you spend here, where your homes and family are based and several other connections with the country.”
The UK tax year runs from 6 April to 5 April, and anyone who spends at least 183 days in the country during that period will normally be treated as UK-resident. If the couple arrived in late August and stayed continuously until 5 April, they would pass that threshold. UK residents are generally liable for tax on their worldwide income and gains, which could bring American earnings, investments, royalties and overseas property income into scope.
People who move to Britain partway through a year can sometimes qualify for split-year treatment, which divides the tax year into an overseas part and a UK part so that certain foreign income arising before the move stays outside the UK tax net. HMRC’s guidance on the statutory residence test sets out eight cases in which a year can be split, each with its own conditions, all of which must be met.
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