SEISEI INSIGHTS — Cross-border Compliance
The Pre-Migration Tax Checkup: Before You Move Your Tax Position
2026-07-14
When someone tells us "I'm relocating abroad," the first thing we confirm is not the destination. It is a single question: "Have you done a pre-migration tax checkup?" More often than not, the phrase itself is new to them. And in our experience, those who switch their status without it tend to carry a tax burden that could have been avoided. This article sets out the structure of that checkup as general information.
A pre-migration tax checkup means taking stock of your assets, income, and structures before you cease to be a tax resident of one country and become a resident of another — so that you understand the tax consequences at the very moment your status changes.
Leaving Can Itself Be a Taxable Event
What is easily overlooked is that moving your residence can trigger tax even when you have sold nothing. Japan has an exit taxation regime: a resident holding securities above a certain value who moves their residence out of Japan is treated as having disposed of those securities at that moment, and the unrealized gains are taxed (Income Tax Act, Article 60-2). The gateway is whether the value of the securities held reaches ¥100 million or more.
This logic is not unique to Japan. Scope and conditions vary widely by country, but the notion of treating "departure" — or the renunciation of nationality or residence status — as a taxable milestone appears across many jurisdictions.
Exit Taxation Across Major Jurisdictions: The Shape of Each Regime
The table below sketches the underlying approach of each regime in broad terms. Because the specific conditions, rates, and thresholds differ by country and change frequently, any actual determination must rest on confirmation by a licensed professional in the country concerned.
| Country / Region | Approach to taxation on departure or exit |
|---|---|
| Japan | On a resident's move abroad holding securities above a set value, a deemed disposal taxes the unrealized gain (Income Tax Act, Art. 60-2) |
| Australia | On departure, certain assets may be treated as a deemed disposal |
| Canada | On departure, assets held are, in principle, treated as a deemed disposal |
| United States | On renouncing citizenship or a green card, tax may apply to those meeting certain conditions |
| United Kingdom | The scope of inheritance tax is tied to years of residence and may continue to reach a person for a period after they leave |
| China | There is no tax on departure as such, but anti-avoidance rules and international information exchange may still apply |
The point is that crossing a border does not sever you from taxation. Most countries preserve some taxing right either at the moment of departure or for a defined period afterward.
Five Things to Confirm Before Relocating
- Take stock of assets — set each asset's acquisition cost against its current value and identify the unrealized gain
- The moment residency switches — since many countries count days of presence, track to the day when you become a resident of the new country and cease to be one in the old
- Trust and corporate structures — in some countries the tax treatment differs depending on whether a structure is established before or after the move
- Timing of income and dividend recognition — the same income may be treated differently depending on which country recognizes it, so design the timing in advance
- Social security agreements — check whether a bilateral agreement exists to avoid paying contributions twice
The Best Timing Is Before You Begin
What you most want to avoid is acting in haste. By the time the visa is granted and travel is set, the options left are sharply limited. Restructuring assets, adjusting income recognition, and designing structures all take time to prepare.
Because many procedures settle on an annual basis, it is prudent to run the checkup before starting the relocation process — as a rule of thumb, roughly one to one and a half years ahead — so that planning can proceed with room to spare.
Treat It as a Structural Question
Relocation is the movement of a person, but tax neither follows automatically nor disappears automatically. How residency categories, asset locations, and each country's taxing rights intersect at the moment of the move is something worth drawing as a single structural diagram in advance. That is the starting point of a smooth relocation.
This article provides general information on tax systems and does not constitute individual tax consultation. For the specific requirements and tax computations of each country, we introduce licensed professionals in the relevant jurisdictions and partner tax accountants, and qualified professionals handle the matter.