A Smart Move for Expats Returning to the UK

You’ve built a life in Dubai, Abu Dhabi, or elsewhere in the Middle East — zero income tax, high earnings, and total financial freedom. But what happens when you move back to the UK? What tax strategy is needed when returning to the UK?

Suddenly, every financial move you make is under HMRC’s microscope.

• Capital Gains Tax (CGT) on worldwide assets
• Dividend taxes on investment income
• Taxable encashment of savings and investments
• Inheritance tax risks

Many expats unknowingly walk straight into huge tax bills — often because they used platforms like SAXO or Interactive Brokers, which weren’t designed for returning UK residents. Let’s talk about a robust tax strategy for when returning to the UK.

The solution: A tax-efficient investment structure called a Portfolio Bond (PPB).

In this guide, we’ll break down what makes a solid tax strategy when returning to the UK:

• Why tax-efficient investing is critical for UK-bound expats
• How PPBs provide tax deferral and structured withdrawals
• Why platforms like SAXO and IB create massive tax inefficiencies
• Key tax-saving strategies like Time Apportionment Relief (TAR) and Spousal Transfers
• Case studies showing the cost of poor planning vs. smart financial structuring

What Is a Portfolio Bond (PPB)?

A Portfolio Bond (PPB) is an investment structure that consolidates multiple assets such as bonds, funds, ETFs, etc. inside a tax-efficient wrapper.

For expats moving back to the UK, the biggest advantage is TAX DEFERRAL — your investments can continue growing without immediate tax liabilities.

With a PPB, you can:

• Control when and how you pay tax (instead of HMRC taking a lump sum upon return)
• Withdraw up to 5% of your original capital per year tax-free
• Utilize Time Apportionment Relief (TAR) to reduce taxable gains
• Segment your investments for strategic withdrawals

The Tax Nightmare of Moving Back Without a PPB

Returning to the UK, you immediately fall under UK tax laws — meaning your worldwide assets are now exposed to Capital Gains Tax (CGT) and Income Tax.

Many expats assume platforms like SAXO or Interactive Brokers will save them money with lower fees — but they fail to see the tax traps that wipe out those savings. Let’s look at real-world case studies to prove this point.

Case Study: The SAXO Tax Trap

• Michael, a British expat in Dubai, invested £500,000 via SAXO.
• Over 5 years working overseas, his investments grew by £200,000.
• When he moved back to the UK, he faced a future liability of CGT on his gains.

His tax bill? £46,320.

Why?

• SAXO does NOT offer tax deferral — meaning gains are taxed the moment he sells assets.
• Capital gains over £3,000 (2024/25 CGT allowance) are taxed at 24% for higher earners.
• No way to spread tax liability — Michael took the full hit in a single tax year.

The Smart Alternative? A PPB.

Had Michael invested via a PPB, he could have:

• Deferred taxation until he strategically withdrew funds
• Used Time Apportionment Relief (TAR) to reduce taxable gains
• Utilized the 5% tax-free withdrawal allowance

Result? Zero immediate tax and a much lower liability over time.

In addition to the above, there is also a spousal transfer strategy option so let’s look at this case study:

David and Sarah, a British expat couple in the UAE, built a £300,000 investment portfolio using Interactive Brokers. Upon returning to the UK, they were facing a significant CGT bill on the sale of those assets.

What they should have done is hold the investments inside a PPB, instead, they ended up paying tax they could have completely avoided.

The Power of Time Apportionment Relief (TAR)

If you’ve been non-UK resident for years, Time Apportionment Relief (TAR) allows you to reduce your taxable gains when you return. This is a huge part of a solid tax strategy when returning to the UK, and here’s an example as to why:

• Linda, a British expat in Dubai, invested £400,000 in ETFs using Interactive Brokers.
• Over 8 years, her passive portfolio grew by £250,000.
• Upon returning to the UK and without advice or action, her full gain internationally would be taxable in the future — resulting in a £60,000+ CGT bill.

Had she used a PPB, TAR would have drastically reduced her taxable gains.

The Hidden Tax Perks of PPBs: 5% Withdrawals & Segmentation

A PPB offers two more critical tax-saving benefits:

5% tax-free withdrawals where Expats can withdraw up to 5% of their original investment per year tax-free.

Example: Steve invested £400,000 in a PPB but took NO withdrawals for 5 years.
When he returned to the UK, he had £100,000 tax free withdrawal and 20,000 per year tax-free for the next 15 years — a massive advantage over direct investments taxed on realization.

Segmentation for tax control as PPBs allow you to break investments into segments, offering flexibility in how withdrawals are taxed.

Example: Tom, a returning expat, liquidated a large portion of his SAXO portfolio. Result? Massive tax hit.
Had he used PPB segmentation, he could have withdrawn in smaller tranches, minimizing his tax burden.

The Real Cost of “Low-Cost” Platforms Like SAXO & IB

Many expats fall for the low-fee model of SAXO or Interactive Brokers — without realizing that:

• The tax inefficiencies will cost them far more than they save on fees.
• Lack of tax deferral means fund switches or withdrawals are taxed immediately after return.
• Lack of segmentation means they have zero flexibility in withdrawals.

Example: Julie saved £2,000 in fees using SAXO — but lost £50,000 in taxes due to unplanned capital gains.

The Smart Move: Secure Your Wealth Before Returning to the UK

Your tax strategy needs to be airtight.

• PPBs provide tax deferral, structured withdrawals, and long-term tax efficiency.
• Platforms like SAXO and Interactive Brokers can create tax nightmares for returning expats.
• If you wait until after you return, you lose many of these advantages.

Take Action Now: Protect Your Wealth Before It’s Too Late

Book A Discovery Meeting

If you need more advice, then contact Mike Coady today to discuss our solutions and how we can help.

About Mike Coady

Mike Coady is an expat expert based in Dubai and is on hand to help with all of the above and more.

Mike is an award-winning money coach and industry leader in the financial sector.

Qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Fellow of the Institute of Sales Management (FISM), a Fellow of the Association of Professional Sales (F.APS), a Fellow of the Institute of Directors (FIoD) and featured as a highly qualified Financial Adviser in Which Financial Adviser.

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Blog published by Mike Coady.