Picture a common modern exit:
A founder signs an LOI in Country A. Closes the deal while living in Country B. The company is incorporated in Country C. The buyer pays from Country D. The money lands in a bank in Country E.
Everyone assumes the tax result follows one simple idea:
“Where I live now is where I pay.”
That assumption is where expensive mistakes start.
Because you don’t sell an asset “in a country.”
You sell it while multiple countries can plausibly claim you—and in 2026, information moves faster, banks ask more questions, and there is less room to “clean it up later.”
This article explains the risk in simple language and gives a practical Exit Readiness Pack you can use before any big sale.
Why exits are different from regular income
Regular income is frequent and usually small enough that mistakes can be fixed later.
Exits are different:
- A company sale, property sale, or large liquidation can create life-changing numbers.
- One wrong assumption can mean double tax, penalties, years of disputes, or frozen proceeds.
An exit is also the moment when:
- tax authorities pay attention,
- banks do enhanced checks,
- buyers do deeper diligence,
- and reporting systems connect the dots.
The four “status spans” that create exit failure
Most cross-border exit problems come from one (or more) of these:
1) Dual tax residency
Two countries claim you as a tax resident under their own laws.
You might feel “I’m not really resident anywhere.”
But some countries will still claim you if you have strong ties.
2) Split-year ambiguity
You moved mid-year and your documentation is weak.
You may think you have a clean split-year, but the rules differ by country, and proof matters more than your story.
3) Entity mismatch
Your company is “resident” in one place on paper, but management and control happens elsewhere.
That can change:
- treaty access,
- corporate tax exposure,
- and how buyers and banks treat your structure.
4) Asset location vs owner location mismatch
The asset’s location and the owner’s location do not “align.”
Examples:
- property in one country, owner lives in another,
- shares in one country, management decisions elsewhere,
- crypto sold on a platform that reports to multiple tax authorities.
Why 2026 makes exits harder (the current-event pegs)
1) Crypto exits are becoming automatically visible
The European Commission says DAC8 enters into force on 1 January 2026, expanding tax transparency to crypto-asset transactions.
The Financial Times reported that the UK and 47 other countries began CARF reporting requirements on 1 January 2026, with platforms collecting and reporting user and transaction details, and international exchanges of data starting in 2027.
Simple meaning: if your exit includes crypto—directly or indirectly—your records need to be “audit grade” at the time of sale, not later.
2) Banks are structurally more conservative
AMLA (the EU Anti-Money Laundering Authority) says that from 2028 it will directly supervise 40 high-risk financial institutions or groups, and it has already published tools and methods to harmonize supervision.
In plain language: EU-linked banking is moving toward more standardized, stricter expectations, which often means slower approvals for complex cross-border proceeds.
3) The “who claims you” problem is being worked on at OECD level
KPMG notes that during 2025 the OECD agreed to explore tax issues created by the global mobility of individuals, because cross-border movement creates uncertainty and disputes.
The OECD also scheduled a public consultation meeting in January 2026 on these global mobility questions.
Simple meaning: residency ambiguity is not a niche issue anymore. Policymakers are actively trying to reduce uncertainty over time.
4) U.S. persons face an extra “hard wall” on exits
The IRS explains that expatriation tax rules under IRC 877 and 877A can apply to U.S. citizens who renounce and certain long-term residents who end U.S. tax residency.
And for tax year 2026, KPMG reports inflation-adjusted thresholds including:
- $211,000 average annual net income tax liability test, and
- $910,000 exclusion amount for the mark-to-market deemed sale calculation.
If this applies to you, it’s a pre-sale planning issue, not something you fix after closing.
The Exit Stack: 5 layers you must manage
Most people optimize only one layer (usually taxes). But exits fail when you ignore the full stack.
Layer 1: Personal tax residency
Who can tax you as a resident?
Layer 2: Source-country claims
Where is the asset? Where is value created? Where is the buyer paying from?
Layer 3: Treaty and tie-breaker reality
If two countries claim you, treaties may help—but only if you can prove the facts (home, family, center of life, etc.).
Layer 4: Entity substance and governance
Where is the company actually managed? Where are key decisions made? Are records clean?
Layer 5: Bankability of proceeds
Will the money clear smoothly, or get held for review?
In 2026, Layer 5 has become just as important as Layer 1, because even if your tax is “fine,” frozen proceeds can still destroy your deal.
The Exit Readiness Pack (the folder that protects your exit)
If you keep one thing from this article, make it this.
Build one folder—digital is fine—and keep it updated.
1) Residency evidence file
- travel logs (simple, consistent)
- leases, utility bills
- school enrollment (if relevant)
- local registrations
- tax residency certificate (if available)
- proof of where you actually live and work
2) Transaction narrative memo (one page)
- what you’re selling (company shares, property, portfolio, etc.)
- why the buyer is paying you
- when you acquired it and how
- where proceeds will land
- who your advisors are (for compliance follow-up)
3) Source of wealth + source of funds trail
- cap table (for founders)
- purchase agreements
- dividend history
- bank statements showing the trail
- crypto exchange records (if relevant), especially with DAC8/CARF going live
4) Entity governance pack (especially for founder exits)
- board minutes and key resolutions
- signing authority and who can bind the company
- where decisions were made and who made them
5) Counterparty and sanctions hygiene
- buyer identity basics
- escrow documentation
- legal opinions where needed (especially for regulated sectors)
This pack does two jobs:
- reduces tax dispute risk, and
- reduces “payment held for review” risk.
The 90-day exit timeline (what to do before you sign LOI)
This is a simple operator-style timeline. Adjust to your deal speed.
T–90 days: decide your residency story (before the deal heats up)
- Pick your “clean story”: where you are resident now, and what will change (if anything)
- Don’t move countries casually during the sale process unless you have a plan
- Ask your tax advisor: “Who can plausibly claim me this year?”
T–60 days: clean the structure and the documentation
- Update your cap table and key contracts
- Gather source-of-wealth documents
- Prepare the one-page transaction memo
- Confirm where proceeds will land and whether that bank is comfortable
T–30 days: pre-clear the banking and reporting reality
- Tell your bank a large payment is coming
- Provide the memo and supporting documents before the wire
- Confirm the bank’s preferred format and timing
Closing week: keep it consistent
- Match names across documents and accounts
- Use clear payment references (“Share sale proceeds under SPA dated X”)
- Avoid last-minute account changes that trigger onboarding delays
T+30 days: file and document, don’t disappear
- Save closing statements and proof of funds movement
- Document your final residency facts for that tax year
- Start filings early if split-year complexity exists
The 6 classic exit traps (and the simple fix for each)
Trap 1: Signing vs closing in different tax years
Problem: one date creates the tax event, and you assume it’s the other date.
Fix: decide timing intentionally and document why.
Trap 2: Moving during the sale process
Problem: you create split-year ambiguity and dual residency risk.
Fix: pick one clean approach:
- move before LOI, or
- move after closing, or
- move after proceeds land
Don’t “float” between regimes unless you have strong proof.
Trap 3: Paper residency with weak substance
Problem: you claim residency in a place you can’t prove.
Fix: build the residency evidence file now.
Trap 4: “Deemed disposal” or exit tax surprises
Problem: changing residency triggers taxes on unrealized gains in some systems.
An Italian ruling (No. 208/2025) highlighted attention on taxation of unrealized capital gains when individuals transfer tax residence abroad.
Fix: model departure consequences before you break residency, not after.
Trap 5: Entity managed from the “wrong” place
Problem: management and control sits somewhere you didn’t plan, which can spook buyers and trigger tax filings.
Also, cross-border remote work can create tax hooks (like PE) in certain fact patterns; the OECD’s 2025 Model Tax Convention update clarified when a home office can create a PE, including a “50% working time” benchmark and a “commercial reason” test in many cases.
Fix: tighten governance: minutes, decision logs, signing authority limits.
Trap 6: Proceeds land in a bank that doesn’t know the story
Problem: the payment is held because compliance has no context.
Fix: pre-clear with your bank and send your memo + documents first (don’t wait for the hold).
Mini case studies (simple examples)
Case 1: The crypto-heavy founder exit
You sell equity, but your wealth trail includes crypto—early treasury holdings, token comp, or old exchange activity.
In 2026, DAC8 and CARF make crypto transactions and residency data easier to share and analyze.
If your records are messy, the exit becomes a documentation emergency.
Lesson: treat crypto records like bank records. Export them, organize them, and align them with your tax story.
Case 2: The U.S. “covered expatriate” risk
Someone plans to renounce after a big liquidity event, or they assume expatriation rules are “later.”
The IRS makes clear that expatriation tax rules can apply under IRC 877 and 877A.
And the 2026 thresholds matter in planning.
Lesson: if expatriation is part of your life plan, model it before the exit, not after.
Case 3: The “two residency” year
A founder spends time in two countries, keeps ties in both, and closes a deal during a messy year.
OECD and governments are actively focused on mobile individuals and the uncertainty this creates.
In practice, the country with stronger ties may claim you.
Lesson: the tie-breaker is not your preference. It’s your evidence.
Who decides whether your exit is taxable, delayed, or blocked
These are the key players behind the scenes:
- European Commission: sets transparency rules like DAC8 (effective 1 Jan 2026).
- OECD: sets model treaty guidance and is actively consulting on mobility issues.
- HMRC and other tax authorities: receive CARF-era reporting starting 2026 (UK + many countries).
- AMLA + EU-linked banks: push stricter, more standardized AML expectations that shape onboarding and large transfers.
- IRS: defines U.S. expatriation tax rules for those who fall into that category.
The simple takeaway
If you’re globally mobile, your exit is a multi-jurisdiction transaction, even if the asset itself is simple.
In 2026, transparency and bank conservatism mean:
- countries learn more, faster,
- banks ask more, sooner,
- and the cost of weak documentation is higher.
The solution is not to “find the perfect country.”
The solution is to be exit-ready:
- choose a clean residency story,
- build the Exit Readiness Pack,
- run the 90-day timeline before LOI,
- and treat bankability as part of the exit plan, not an afterthought.
I-Invest note: This is educational content, not legal or tax advice. Use qualified advisors for your facts.
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