The country you left keeps a claim on your gains for years

A trailing taxing right for the country someone has left. Article 13 keeps that right alive. The general rule does not stop a country taxing gains on any property, where the individual lived there at some point in the six years before the disposal.

So leaving does not close the question immediately. It starts a clock.

Gains normally belong to the country of residence. The article gives gains from alienating property outside its earlier paragraphs to one country alone: the one where the seller now lives.

That paragraph is what most people have in mind when they plan a move. It is accurate as far as it goes, and the following paragraph limits it. Both governments publish the convention and its supporting documents.

So read to the end of the article before relying on it. The protection is real, and the final paragraph qualifies it.

It preserves a right rather than creating a new charge. The provision says the general rule shall not affect the right of a country to tax such gains according to its own law.

So the treaty steps out of the way and domestic law decides what happens. Whether a charge actually arises depends on the rules of the country you left.

That distinction matters. The paragraph removes a protection rather than imposing a tax of its own.

It answers an obvious planning move. Without it, anybody facing a large gain could become resident somewhere else and simply sell from the new country.

So the six years give the former country a reasonable period to keep its claim. The treaty six-year rule is an anti-avoidance measure wearing very plain clothes.

Individuals, and the drafting is explicit about that. The paragraph refers to gains derived by an individual who is a resident of the other country and was a resident of the first country within the window.

So a company that migrates does not fall within this provision. Corporate residence raises entirely different questions, and this paragraph is not one of them.

So an individual who moves and a company that migrates face different analyses. Do not reason from one across to the other.

Any property at all, which runs unusually wide for a treaty provision. The paragraph speaks of gains from the alienation of any property rather than listing categories the way the earlier paragraphs do.

So shares, funds, business interests and personal assets all sit within its scope. The limiting factor is the six-year window rather than the nature of what you sold.

So the question is never really what you sold. It is when you sold it, and where you had been living.

Backwards from the disposal, not forwards from the move. The paragraph asks whether the individual lived in the first country at any point during the six years immediately preceding the alienation.

So the date that matters is the sale itself. Each disposal stands on its own facts, against its own preceding six years.

That framing rewards patience and punishes assumptions. A gain in year seven falls outside the window, even though one in year six does not.

The paragraph says at any time during the six years, which is broad language. It does not set a minimum period of residence within the window, and it does not ask how long you lived there.

So a short period of residence inside the window can engage it. Anybody planning around the edge of the six years should take advice, rather than assume a brief stay counts for nothing.

Still, residence is a legal conclusion rather than a count of nights. Establish it properly rather than estimating from a diary.

A separate paragraph deals with land and buildings, and it applies regardless of this one. The other country may tax gains attributable to the alienation of real property situated there.

So selling a house you kept behind does not depend on the six-year point. The source country can tax that gain whenever it happens.

More than the obvious, and the article defines it country by country. It includes rights to assets produced by exploring or exploiting the sea bed and subsoil, and the natural resources there.

Where the other country is America, it covers a United States real property interest, which carries its own withholding regime in Publication 515. Where the other country is Britain, it reaches shares deriving their value or most of it from UK real property, other than shares regularly traded on a stock exchange.

It also reaches an interest in a partnership or trust, to the extent the assets of that partnership or trust consist of UK real property or of those shares.

Another paragraph covers property forming part of the business property of a permanent establishment. That country may tax gains on it, including gains from selling the establishment itself.

One detail is easy to miss. The paragraph applies whether or not the permanent establishment still exists at the time of the disposal, and it covers an establishment the enterprise has or had.

So closing the operation first does not remove the exposure. Our guide to permanent establishment covers how one arises, and the IRS summarises the related idea of effectively connected income.

A further paragraph protects gains on ships and aircraft operated in international traffic, on containers used in international traffic, and on property pertaining to their operation.

Those gains are taxable only in the country of the enterprise. The provision stands apart from the residence rule and from the six-year window alike.

That carve-out reflects how such businesses actually operate. Assets that move between countries sit poorly with any source rule.

They are separate mechanisms running on separate clocks, and conflating them causes real errors. Britain has its own rules for people who leave and later return, and America has its own regime for people who give up status.

The treaty paragraph does not replicate either. It simply declines to stop the former country applying whatever its domestic law provides.

So check both. Our guide to selling up before a move covers the British planning angle, and the treaty question sits on top of it.

So the treaty six-year rule can fall away while a domestic rule still bites, or the reverse. Two clocks, two answers, and both need checking.

Yes, through the credit mechanism rather than through this article. Where both countries tax the same gain, the relief provisions allocate a credit so the amount is not simply charged twice over.

You still have to claim that relief and evidence it. It is also capped, so the order in which the two charges arise can matter to the final cost.

Residence dates, supported by something better than memory. The treaty six-year rule turns entirely on where somebody lived and when, so the file has to establish both.

Keep the ordinary proof as you go along. Tenancies, employment records and travel patterns all help, and all of them are far easier to gather at the time.

Check the date against your residence history before committing to a disposal. The treaty six-year rule turns on facts you already know, and the answer is available in advance.

In our practice the cost is almost always timing rather than tax rate. People sell inside the window because nobody told them a window existed.

A disposal date is usually movable. That is the whole value of knowing the rule exists before you commit to anything.

Take an illustrative case. Someone leaves Britain for America in 2021 and sells a private company shareholding in 2025, realising a substantial gain.

The general rule would give that gain to America alone. But Britain was their country of residence within the preceding six years, so the treaty does not prevent Britain taxing it.

Whether Britain actually charges depends on its own law. The treaty has simply declined to stand in the way.

Notice what actually mattered. Not the asset, and not the size of the gain, but the gap between leaving and selling.

The commonest is treating the move itself as the end of the matter. The general rule reads that way until you reach the final paragraph.

The second is counting from the date of departure rather than back from the disposal. The paragraph measures the six years immediately preceding the sale.

After those comes the assumption that it only catches shares. It reaches gains on any property, which is far wider than most planning assumes.

A fourth is assuming the treaty itself charges the tax. It only declines to prevent the former country from doing so.

First we build the residence history and set it against the proposed disposal date, because that single comparison answers most of the question. Then we check which paragraph of the article actually governs the asset.

Where the window is still open, we tell you when it closes. Start with our treaty relief service, or reach us through our contact page.