Q&A: What You Must Know Before Migrating a UK Company to Europe

Considering relocating your UK-incorporated business to Europe? Our straightforward Q&A explains the critical tax implications—residency rules, exit charges, payment plans—and how expert advice can make your move seamless and compliant.

Q1: Is my UK‑incorporated company still taxed in the UK after moving operations abroad?

A: Yes, at first. UK-incorporated companies are deemed UK-resident until they successfully migrate. Even after moving operations, the UK continues to regard the company as resident unless it becomes treaty non-resident, determined by a tax treaty "tie-breaker" based on effective management location.

Q2: What happens once it becomes a European resident?

A: If the competent authorities agree in favour of your new base, your company becomes non-UK resident for corporation tax, only liable on UK-sourced income (like property or permanent establishments in the UK)

Q3: Are there tax "exit charges" triggered by migration?

A: Yes. Migration causes a deemed disposal of UK assets at market value, potentially triggering:

• Final UK corporation tax for profits up to the migration date

• Revaluations of stock, capital assets, and intangibles, possibly resulting in gains or allowances

• There is relief for UK property—gains can be deferred unless you elect within two years

Q4: Can I delay the tax bill and pay over time?

A: Absolutely—if you’re relocating to an EEA country, the UK allows an Exit Charge Payment Plan (ECPP). This lets you spread your exit tax over six years (with interest), easing cash flow .

Q5: What steps must I take before migrating?

A: To stay compliant, you need to:

• Notify HMRC using form CTM34195

• Declare any pending UK tax liabilities

• Close your current UK accounting period on the migration date

• Assign market values to UK-held assets

• Failing to do so can lead to extra taxes or even personal liability for directors.

Q6: Why should I use a tax professional?

Because:

• Treaty residency is based on facts like board meetings and where decisions are made—get it wrong, and dual-taxation risk flies in

• Exit charges depend on complex valuation, elections, and timing—missteps can be costly

• Payment plans require pre-migration applications—missing the window means losing this relief

Final Take

Moving your UK company to Europe brings strategic benefits—but comes with significant UK tax considerations. Expect:

• Dual residency under UK rules

• Deemed disposals of UK assets

• Exit tax charges with deferral options

• Strict deadlines for HMRC notifications and elections

The Tax Faculty specialises in cross-border migrations. We guide you through every step—from residency analysis to exit charge planning, payment deferral, and post-migration monitoring—so your move is effortless, efficient, and tax-smart.

📞 Planning a European move? Get in touch with The Tax Faculty for expert guidance on making your business relocation compliant and cost-efficient.

Capital Gains Tax Expertise: The Tax Faculty LLP Managing Partner Charles Tateson Named UK Capital Gains Tax Advisor of the Year 2023

The Finance Monthly Taxation Awards recognises the achievements of tax professionals from around the globe.

Winning such an award is no small feat. It is a reflection of hard work, extensive knowledge, and an ability to navigate the intricacies of the UK tax system.

Read more about Charles and the award here.

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