The Treasury is drawing up plans for a new “settling-up charge” that would impose a 20 per cent capital gains tax on assets held by wealthy individuals who choose to leave the United Kingdom. The proposal, currently under review, would apply to people who retain shareholdings or other business interests after relocating abroad. It is intended to prevent individuals from avoiding tax by moving their residence before disposing of assets that have gained value while they were based in Britain. The measure is one of several options being considered by Chancellor Rachel Reeves as part of a wider reform of capital taxation ahead of the next Budget. According to Treasury modelling cited by The Times, the proposed levy could raise around £2 billion for the Exchequer. Officials believe the charge would bring the UK closer into line with other G7 countries, many of which already have exit taxes covering gains made before emigration. The policy would focus on assets such as company shares, real estate investments and business holdings that remain under UK jurisdiction even after their owners have become non-residents. The idea has been under discussion in the Treasury since early autumn and is expected to form part of a broader package addressing tax avoidance by high-net-worth individuals. Under existing law, those who move abroad can often sell certain assets without paying UK capital gains tax if they wait until after becoming non-resident. The proposed reform would end that practice by introducing a deemed disposal at the time of departure, taxing unrealised gains that accumulated while the individual lived in Britain. Officials are said to be considering whether to allow payment to be deferred for several years, possibly until the asset is sold, to avoid liquidity problems for those affected. The Treasury is also exploring mechanisms to ensure that double taxation agreements with other countries are respected. The potential change follows a series of fiscal measures aimed at closing loopholes used by affluent taxpayers. Earlier this year, the government confirmed that it would replace the non-dom regime, which allows some residents to avoid tax on overseas income, with a time-limited arrangement. The combination of that decision and the proposed exit charge signals a broader tightening of tax rules for internationally mobile individuals. Treasury sources told multiple outlets that the new policy is intended to ensure that gains generated in Britain are taxed in Britain, even if the taxpayer subsequently leaves the country. The measure would apply mainly to individuals with substantial holdings in private or listed companies, along with real estate portfolios structured through corporate vehicles. While the Treasury has not released formal estimates of how many people might be affected, independent tax experts suggest the number could run into the low thousands each year. Those considering relocation to lower-tax jurisdictions such as Monaco or Dubai would likely be among those most directly impacted. The charge would not apply to ordinary taxpayers or to those whose assets fall below existing capital gains thresholds. The government has indicated that full details will be announced as part of the next Budget process. The measure is being examined alongside other potential revenue-raising steps, including changes to inheritance-tax thresholds and corporate tax reliefs. Treasury officials have been asked to study the administrative burden of the proposed charge, particularly how HM Revenue and Customs would calculate and collect liabilities when taxpayers have complex international holdings. The plan would require new reporting rules for departing residents to declare all relevant UK-based assets at the point of exit. Comparable systems already operate in several other major economies. France imposes an exit tax on residents with significant shareholdings, while the United States applies a similar regime to certain high-net-worth expatriates. The Treasury is believed to have studied both models to assess how a British equivalent might function. Officials are also reviewing how to prevent avoidance through trusts or offshore structures. The move aligns with international efforts to limit cross-border tax arbitrage and ensure that gains arising within a jurisdiction are not lost to the tax base when individuals emigrate. Industry figures have said that the proposal could have implications for investment flows and residency decisions among high earners, though formal consultations have not yet begun. Business advisers are expected to seek clarity on whether entrepreneurs who temporarily relocate for professional reasons would be treated differently from permanent emigrants. The Treasury has not indicated whether exemptions will be available for those returning within a defined period, as is the case in some European systems. The plan remains at the consultation stage, with final drafting to depend on Budget negotiatio...