The Budget 2026: What does it mean for international private clients?

Budget 2026 introduced only limited changes for international private clients, but several measures could still have a meaningful impact. Updates affecting overseas trusts, US LLCs, protected cell companies and internationally mobile employees highlight the continued importance of proactive tax planning for individuals moving to, from or living in the UK with international assets and interests.

Internationally mobile individuals have faced a significant amount of UK tax reform in recent years. The abolition of the remittance basis, introduction of the four-year foreign income and gains (FIG) regime and move to a residence-based inheritance tax system from April 2025 fundamentally changed the landscape for individuals coming to, living in or leaving the UK.

Against that backdrop, Budget 2026 was relatively quiet for international private clients. There were, however, some targeted changes which could affect individuals with overseas trusts, companies and investment structures, as well as those moving to the UK.

Relief for temporarily UK-resident trusts

The Government has announced a targeted Capital Gains Tax relief for trusts that temporarily become UK resident because one of more of their trustees move to the UK.

Under the existing rules, when a trust ceases to be UK resident it may be treated as disposing of, and immediately reacquiring, relevant assets at market value. This can result in a Capital Gains Tax exit charge, even if the trust’s period of UK residence was brief and arose inadvertently because of a trustee’s move to the UK.

The new relief will prevent an exit charge arising where the trust ceases to be UK resident later in the same tax year, or in the following tax year. The measure applies to relevant exit charges arising on or after 28 October 2026.

This is a helpful change for internationally mobile trustees, but it does not mean that the trust is treated as never having become UK resident. The trust’s UK tax and reporting position during its period of UK residence will still need to be considered.

The relief is also specifically directed at trusts that become UK resident because one or more trustees move to the UK. Trustees should therefore continue to review the residence implications before moving to the UK and take prompt advice if a trust has unexpectedly become UK resident.

Addressing double taxation for US LLCs and similar entities

A particularly welcome announcement concerns overseas entities which are treated differently for tax purposes in the UK and in their home jurisdiction.

US Limited Liability Companies (LLCs) are the best-known example. The US may treat an LLC as transparent, meaning the individual member is taxed directly on the profits as they arise. The UK can, depending on the circumstances, treat the entity differently and only tax the individual when profits are distributed from the LLC.

This mismatch can create a significant problem. The US and UK liabilities be deemed to arise on different sources of income, potentially making it difficult to obtain credit in one country for tax paid in the other. The result can be a significant level of double taxation.

The Government has announced a new foreign tax credit mechanism designed to address this problem. The proposed rules are not restricted to conventional US LLCs and could potentially be relevant to other overseas entities where a similar mismatch arises.

This could therefore be particularly important for US individuals moving to or already living in the UK, as well as other internationally mobile individuals with interests in overseas entities.

It may also be worth revisiting structures or investment decisions where the existing risk of double taxation has previously been a concern.

Protected cell companies

Budget 2026 also introduced a change affecting UK residents who hold interests in non-UK protected cell companies (PCCs).

A PCC is a company containing a number of separate “cells”, with the assets and liabilities of each cell segregated from those of the other cells. Such structures are used in a number of overseas jurisdictions, particularly in investment and insurance arrangements.

Existing UK anti-avoidance rules can attribute gains realised by a non-UK resident close company to UK-resident individuals, trustees or companies who have an interest of more than 25% in that company.

The Government is changing those rules for PCCs so that the 25% test can also be applied by reference to a person’s interest in an individual cell, rather than only their interest in the PCC as a whole.

This prevents interests held through a PCC from falling outside the rules simply because an individual’s interest in the overall company does not exceed the 25% threshold.

The change applies to gains arising on or after 28 October 2026. UK residents with interest in overseas PCCs should therefore review their arrangements to establish whether gains within a particular cell could now be attributed to them for tax purposes.

Moving to the UK for work

There was also a smaller but useful change for internationally mobile employees.

Where an employer pays certain immigration costs associated with sponsoring an employee under the Skilled Worked route, including the Immigration Skills Charge and Certificate of Sponsorship fee, the employee will no longer face an income tax charge on those amounts.

For internationally mobile executives the amounts involved may not be significant compared with the wider tax considerations of relocating, but the change removes an unwelcome tax cost associated with moving to the UK for employment.

No further major overhaul of FIG regime

Perhaps as important as what changed is what did not.

The new FIG regime, introduced from 6 April 2025, remains central to planning for individuals moving to the UK. Broadly, qualifying individuals who become UK resident following at least ten consecutive tax years of non-UK residence can elect to claim relief on qualifying foreign income and gains during their first four years of UK residence.

This can provide a valuable window in which to consider the timing of overseas income, gains, investment disposals and wider wealth planning.

For longer-term UK residents, the position is very different. Once the four year FIG period has ended, UK residents will generally be taxable on their worldwide income and gains as they arise.

The Temporary Repatriation Facility (TRF) also remains an important transitional planning opportunity for former remittance basis users. The interaction between the new rules and historic offshore funds means that individuals with significant overseas assets should consider their position before the transitional window closes on 5 April 2028.

The relative lack of major international tax announcements in the Budget should not mean that internationally mobile individuals put UK tax planning to one side.

The changes of the last few years mean that there is now a much greater premium on planning before a move takes place.

Individuals moving to or from the UK, or already living here with overseas assets should consider:

• When they will become or cease to be UK resident;
• Whether they can benefit from the four year FIG regime;
• The timing of foreign income and gains;
• Whether existing overseas companies, LLCs or other entities interact efficiently with the UK tax system;
• Whether interests in overseas protected cell companies are affected by the new rules;
• Whether the residence of any family trusts could be affected by the movement of individual trustees;
• The ownership and succession planning for overseas assets; and
• Where relevant, whether historic foreign income and gains should be brought to the UK under the TRF.

For international families, these issues are rarely best considered in isolation. UK income tax, Capital Gains tax and Inheritance tax need to be considered alongside the tax rules in the other jurisdictions concerned.

If you are planning a move to the UK, or already live in the UK and hold significant overseas assets, trusts or business interests, our Private Client team can help you understand how the current rules affect you and identify any planning that should be considered.

Budget 2026: FAQs for International Private Clients

Budget 2026 introduced targeted measures affecting overseas trusts, US LLCs and similar entities, protected cell companies (PCCs), and internationally mobile employees. While there were no major reforms to the UK’s international tax regime, these changes could significantly affect individuals with cross-border assets and structures.

The Government has announced a new foreign tax credit mechanism to help address double taxation issues affecting US LLCs and similar overseas entities. This aims to reduce situations where UK and overseas tax liabilities arise at different times, making tax relief difficult to claim.

Individuals planning a move to the UK should review their residency position, eligibility for the FIG regime, the timing of foreign income and gains, overseas trust and company structures, inheritance tax exposure, and whether they could benefit from the Temporary Repatriation Facility before it closes on 5 April 2028. Early planning can help avoid unexpected tax consequences and identify valuable reliefs.