The order matters. Selling a large position the week before boarding a plane can cost — or save — more than the ticket to the new life. The decision hinges on three questions: does the country being left trigger a tax the day residency ends, does it try to reach back and tax gains realised after departure, and does the destination country give a fresh cost base for the assets carried across the border? Get those three answers right and the sell-before-or-after choice becomes largely mechanical.
This piece walks the decision through four representative regimes — the United Kingdom, Australia, Canada and Portugal — and pulls out the general rules that apply almost everywhere else. Nothing here is a substitute for a local adviser; capital gains tax when moving abroad is one of the places where a single date on a calendar can swing the bill by five or six figures.
The short answer
Three archetypes cover most cases:
- Exit-tax jurisdiction. The country being left deems a sale on the departure date and taxes the unrealised gain. Selling before or after departure produces roughly the same domestic tax bill — it is owed either way — but selling before often preserves reliefs, exemptions and holding-period benefits that vanish once residency ends. Canada is the canonical example.
- Clean-exit jurisdiction with clawbacks. No general exit tax on portfolio assets, but the country reserves the right to tax gains realised during a short period of non-residence if the individual returns. The United Kingdom's temporary non-residence rules are the template. Selling shortly after departure only works if the move is permanent.
- Clean exit, no clawback. Rare in high-tax OECD countries, common in territorial systems. Once non-resident, the gain is beyond reach. Selling after departure is normally optimal — provided the destination country will not tax the built-in gain when the asset arrives.
The destination side of the ledger is thinner. Most countries do not give arriving residents a step-up in cost base; a sale after landing is taxed on the whole gain from original purchase, not just the appreciation since the move. That is where the sell-before argument gets its real weight.
Exit-tax jurisdictions: sell before, or sell on the way out
Canada — deemed disposition
Canadian residents ceasing to be resident are treated as having disposed of most of their property at fair market value on the day residency ends. The gain is included in taxable income at the standard 50% inclusion rate — the proposed two-thirds inclusion above CAD 250,000 was cancelled by the Carney government in March 2025 and is not law. Effective marginal rates on the taxed half of the gain run roughly 16–27% depending on province, per the Canada country page.
The exclusions matter as much as the rule. Canadian real property, registered accounts (RRSP, RESP, TFSA, RRIF) and certain pension interests are outside the deemed-disposition net; those assets stay Canadian for tax purposes and are taxed on eventual sale as a non-resident, generally at 25% Part XIII withholding on gross proceeds unless a treaty reduces the rate or a section 116 clearance is obtained. Everything else — non-registered brokerage accounts, private company shares, crypto, foreign real estate — is caught.
Timing implications. Selling before the residency-ending date allows use of the Lifetime Capital Gains Exemption on qualified small-business shares (CAD 1.25 million as of 2026) and any loss carry-forwards while still resident, and avoids the administrative burden of the T1243/T1244 departure return and the security-for-tax election. Selling after the deemed disposition adds a second Canadian tax event only on excluded property; for everything else, departure day already crystallised the gain, so the cost of holding on is market risk plus the destination country's rate on any further appreciation. Detail is in the dedicated Canada departure tax guide.
Australia — CGT event I1
Ceasing Australian tax residency triggers CGT event I1: a deemed disposal at market value of every asset that is not Taxable Australian Property (TAP). TAP is essentially Australian real estate and interests in land-rich Australian entities; a listed portfolio, an offshore holding company, or crypto held on a non-Australian exchange are all in scope.
There is one important lever the Canadian rules do not offer. An individual can elect under section 104-165 to treat non-TAP assets as remaining Taxable Australian Property until actual disposal. The election defers the tax but keeps the assets inside the Australian net indefinitely — the eventual sale is taxed at non-resident marginal rates, and non-residents are ineligible for the 50% CGT discount on gains accruing after 8 May 2012. Making the election can trap the assets in a worse regime than the deemed disposal itself.
Sell-before is often cleanest for anyone who has held the asset over twelve months: the 50% CGT discount is available to residents and the top effective rate on the discounted gain is 22.5% (half of the 45% top marginal rate on the taxable half, ignoring the 2% Medicare levy), per the Australia country page. Sell-after only makes sense if the destination country has a materially lower rate and the I1 election has not been made, so the exit tax has already crystallised the pre-departure gain. The leaving Australia guide covers the mechanics.
Clean-exit jurisdictions with clawbacks
United Kingdom — no general exit tax, but watch temporary non-residence
The UK does not impose a general exit tax on individuals holding listed shares, crypto or most business interests. A person who becomes non-UK-resident under the Statutory Residence Test can sell a long-held portfolio the following tax year and pay no UK capital gains tax on the disposal, subject to two important carve-outs.
The first is UK real estate: non-residents remain within UK CGT on disposals of UK land and property (residential and, since 2019, commercial), and rebasing rules only shield gains that accrued before 6 April 2015 (residential) or 6 April 2019 (commercial). The second, and the bigger planning trap, is the temporary non-residence rule. An individual who has been UK-resident in at least 4 of the 7 tax years preceding departure and returns to the UK within 5 full tax years is treated as realising in the year of return any gains that arose during the period of absence on assets held at departure. Selling a pre-departure portfolio in the year after leaving only works if the move is permanent — a two- or three-year sabbatical abroad will not sidestep UK CGT on the built-in gain.
UK rates as of 2026 sit at 18% (basic-rate band) and 24% (above), following the 30 October 2024 Budget; residential property gains are taxed at 24%. Selling before departure and using the annual exempt amount, business-asset disposal relief where available, and any losses is often better than betting on a clean escape that a return trip can undo. The abolition of the non-dom regime from 6 April 2025 also removes what used to be a common workaround for foreign-situs gains — verify current UK position with a specialist adviser before any large disposal.
Portugal — no exit tax, but no step-up on arrival
Portugal does not impose an individual exit tax on ordinary emigration. It also does not give an arriving resident a step-up in cost base on financial assets, which is where the timing question flips: an arrival holding heavily appreciated shares, sold after becoming Portuguese-resident, subjects the whole historical gain to the 28% flat rate, even the part that accrued before the move. Portugal will grant a credit for any foreign tax actually paid on the same gain under general double-taxation relief, but where the origin country is a clean-exit jurisdiction (as the UK largely is), there is no foreign tax to credit and the 28% falls on the full gain.
Anyone moving to Portugal from a clean-exit country should therefore consider realising built-in gains before becoming Portuguese-resident and reinvesting at the higher cost base. The old Non-Habitual Resident regime used to exempt many categories of foreign-source capital gains for ten years; that regime closed to new applicants on 1 January 2024 and its IFICI successor does not carry the same broad capital-gains exemption. The specific treatment depends on the asset type, the source country and any applicable treaty — a Portuguese adviser should confirm the current position.
Temporary non-residence: the boomerang
The UK's temporary non-residence rule is the sharpest, but similar concepts exist elsewhere. Australia does not have a formal temporary non-residence clawback for CGT, but its residency tests are famously sticky — the "resides" and domicile tests can pull someone back into Australian residency retroactively if the ATO decides an absence was not permanent, undoing an assumed clean exit. Canada's departure tax is a one-time event, but returning to Canadian residency within a defined period allows an election to unwind the deemed disposition for property still held at re-entry.
The common thread: countries with a residency system based on ties (home available, family present, centre of vital interests) rather than a clean day-count are the ones most likely to have a temporary-non-residence concept, because their residency test is what the clawback restores. A "sell-and-come-back" strategy is a compliance matter, not a lifestyle choice; the destination and duration have to be documented and defensible.
Step-up basis on arrival
Step-up basis is the destination-side lever. In a handful of regimes, on specific asset classes, the cost base for capital gains resets to the market value on a fixed date. Most countries do not offer this on inbound migration. As a general rule, an asset carried into a new country of residence is taxed on eventual sale on the whole gain from original acquisition, not just the appreciation since the individual became resident.
There are exceptions. Certain regimes give substantial-shareholder step-ups for arriving individuals in specific circumstances (the Netherlands, for example, has historically applied a step-up for certain box-2 substantial interests, though the rules have narrowed). Countries offering flat-tax or non-dom-style regimes sometimes achieve a similar effect by exempting the gain rather than resetting the base. The safe planning assumption is no step-up; specific inbound reliefs must be confirmed jurisdiction by jurisdiction and are moving targets.
The absence of step-up is the strongest single reason to prefer selling before arrival where the departure country is a clean-exit one. The gain is realised while no country has a strong right to tax it — the origin because the individual is still resident but the asset may be foreign-situs and covered by a treaty, or because the origin's regime already exempts the class of gain — and the destination inherits an asset at a fresh, high cost base.
Comparison at a glance
| Country | Exit tax on departure? | Clawback on return? | Step-up for inbound residents? |
|---|---|---|---|
| United Kingdom | No (except UK real estate remains taxable) | Yes — temporary non-residence, ≤5 years | No general rule |
| Australia | Yes — CGT event I1 on non-TAP; s.104-165 deferral election available | Residency test itself is sticky | Cost base reset applies on becoming resident for non-TAP acquired earlier |
| Canada | Yes — deemed disposition at 50% inclusion; excludes real property and registered accounts | Unwind election if returning within defined period | Yes — cost base bumped to fair market value on the day residency begins for property not previously taxable in Canada |
| Portugal | No | No formal clawback | No — historical gains taxed at 28% on later sale |
The Canada and Australia inbound step-up entries deserve a caveat: both reset the cost base on the day of becoming resident for assets not previously within the tax net, so the mismatch works in the individual's favour on the way in but is undone by the exit tax on the way out. Verify the specific asset class and any anti-avoidance overlay with a local adviser.
Other timing traps
- Tax-year straddles. Countries define capital gains events on a tax-year basis, and the tax years do not line up. A UK tax year runs 6 April to 5 April; an Australian tax year runs 1 July to 30 June; Portugal and Canada follow the calendar year. A sale a week either side of departure can fall in a different year for each country, changing the applicable rate, the availability of losses and the interaction with any annual exempt amount.
- Treaty tie-breakers. If both countries claim tax residency on the disposal date, the applicable treaty's tie-breaker decides which country has primary taxing rights on the gain. Most modern treaties give capital gains on shares to the residence state, with real property carved out for the situs state. Departure timing that produces a clean single-residence day on the sale date avoids the argument entirely.
- Withholding on assets left behind. Non-residents selling real property in the origin country typically face withholding at gross-of-basis rates (25% in Canada under Part XIII, subject to section 116 clearance). These are creditable against actual liability but tie up cash for months.
- Currency. Capital gains are measured in the local currency of the country doing the taxing, using its rules on cost-base and proceeds translation. A dollar-denominated portfolio that has moved sideways in dollars can show a large gain or loss to a euro-based tax authority purely from FX movement between purchase and sale dates.
Putting it together: a working decision sequence
For an individual moving from one of the four countries covered here, the practical order of operations is:
- Confirm the departure country's treatment. Does it deem a disposal on ceasing residency (Canada, Australia for non-TAP), or is it clean-exit (UK for most portfolio assets, Portugal for outbound movers)? Establish the exact date residency ends under that country's rules.
- Confirm the destination country's treatment on entry. Is there a step-up? Any inbound relief regime that exempts pre-arrival gains for a period? Portugal, Italy's HNWI flat tax and the UK's FIG regime each answer differently.
- Overlay the temporary-non-residence risk. If the move might not stick, the clean-exit story evaporates.
- Look at holding-period reliefs, exemptions and rate differentials on each side and pick the calendar date that lands the disposal in the most favourable combination of the two tax systems. The six-figure downside of getting this wrong justifies a paid opinion from a specialist adviser in both countries before the trigger is pulled.
The answer, in most real cases, is either "sell shortly before departure" (clean-exit origin + no-step-up destination) or "the origin already decided for you" (exit-tax origin, so the pre-departure gain is taxed anyway). The interesting cases are the ones with both an exit tax and a step-up on arrival, or with a special inbound regime that exempts foreign gains — those are where waiting can genuinely reduce the total bill.
Where to go next
Compare the four regimes side-by-side on TaxAtlas Compare, or read the country pages for the United Kingdom, Australia, Canada and Portugal. For the underlying mechanics, the guides on exit taxes, tax residency and double-taxation treaties cover the concepts in more depth, and the FAQ answers common follow-up questions.