Paying close attention to calendars and time spent out of the UK before returning is important for tax reasons. The recent return to the country of the Sussexes, Harry and Meghan, is more than just an opportunity for the usual chatter, it is a time to consider the tax fallout.

When Harry and Meghan, the Duke and Duchess of Sussex, announced in August that they would be spending an “extended period” in the UK, with their children enrolled in British schools, it prompted the usual amount of chatter among those who follow their activities. 

But even for those weary of the Sussexes, the tax implications of their move to the UK did alert advisors to the risks of clients who don’t pay close attention to the calendar. 

If someone was a UK resident in at least four of the seven tax years before departure and returns within five years, certain gains and income realised during the period of non-residence can be “recaptured” and taxed by the UK authorities as if they arose in the year of return. The Sussexes departed the UK in early 2020. This means that they might not capture as many benefits from their American sojourn as they might have hoped. 

According to taxbarristeruk.com in a briefing about the matter, for the Sussexes, “staying away even longer might have been more advantageous. From April 2025, the UK introduced a new four-year Foreign Income and Gains (FIG) regime for qualifying new residents.

“To qualify, a person must have been non-UK resident for at least 10 consecutive UK tax years before becoming UK resident. The regime then allows eligible foreign income and gains to be sheltered from UK tax for the first four years of residence. Had the Sussexes remained abroad for 10 full years rather than roughly six, they might have qualified for this relief on their return. As things stand, they will not,” the website said.

Where an individual becomes non-UK resident and subsequently returns to the UK within a five-year period, certain income and gains realised during the time of non-residence fall into the UK tax net in the year of their return. 

The five-year time period is key, Rebeccah Fontaine, senior manager, EisnerAmper, in the international firm’s international tax services group, told WealthBriefing in a call. 

“It [the five-year rule] is not really top of mind for a lot of people in the US who are thinking of returning to the UK,” she said. “I have a lot of banks who are clients…they send people to the US. A lot of them have no idea [of the five-year rule],” she said. 

“If you are sending people to the US you should tell them about this,” Fontaine continued.

Fontaine is part of a group of advisors, lawyers and other specialists working in the UK who have seen a UK resident non-domiciled system replaced, and seen a trend of US expats coming to the UK. Fontaine, who has 15 years of experience in areas such as international taxation, focuses on foreign trusts, foreign individuals, treaty analysis, expatriation and immigration planning.

This area of UK-US activity is important for Fontaine’s business because about 15-20 per cent of her international clients have this sort of tie to the UK, Fontaine added.