UK Tax Guide for Expats and Non-Residents

Understanding UK tax residency

Your UK tax obligations turn on whether you are UK tax resident. Since April 2013 that has been decided by the Statutory Residence Test, set out in Schedule 45 of Finance Act 2013, which replaced the older and more subjective guidance with a structured set of tests applied tax year by tax year.

The automatic overseas test makes you non-resident if your UK day count falls below the relevant low threshold for your circumstances, or if you work full-time overseas without significant breaks while keeping UK days and UK workdays below the set limits. The automatic UK test makes you resident if your UK day count reaches the high threshold, if your only home is in the UK for a sustained period, or if you work full-time in the UK across a qualifying period.

If neither automatic test settles it, the sufficient ties test applies. The five ties are a family tie, an accommodation tie, a work tie, a ninety-day tie based on presence in the two preceding tax years, and a country tie. The more days you spend in the UK, the fewer ties it takes to make you resident.

Split year treatment

Residency normally applies for a whole tax year running 6 April to 5 April. Split year treatment can instead treat you as UK resident only for the part of the year you were actually here, which can cut your liability significantly in the year you arrive or leave.

It is not automatic. You must fall within one of the qualifying cases in the SRT legislation, covering situations such as starting full-time work overseas, being the partner of someone who does, ceasing to have a UK home, starting to have your only home in the UK, and starting full-time work in the UK.

During the overseas part of a split year you are treated as non-resident and taxed only on UK-source income. During the UK part you are taxed as a resident on worldwide income. You claim it through the residence pages (SA109) of your Self Assessment return.

Double Taxation Agreements

The UK has Double Taxation Agreements with more than a hundred countries, including the United States, Australia, Canada, France, Germany, Spain, Italy, the Netherlands, India, Ireland, South Africa, Japan, New Zealand, Singapore and the UAE. They allocate taxing rights so the same income or gain is not taxed twice.

Relief comes in three forms. Tax credit relief offsets foreign tax paid against your UK liability on the same income, claimed on the foreign pages (SA106). Exemption means certain income is taxable in only one country, which many treaties apply to government pensions. Reduced withholding rates cut the tax deducted at source on dividends, interest and royalties.

Every treaty is different, so the guide directs readers to the GOV.UK tax treaties collection to check the specific terms between the UK and the country in question.

Income Tax and National Insurance for non-residents

If you are non-resident you are generally taxed only on UK-source income: rental income from UK property, employment income for duties performed in the UK, UK state and private pensions, trading income from a UK business or permanent establishment, interest on gilts and certain other UK-source interest, and royalties arising in the UK.

Non-residents who are UK, EEA or relevant treaty-country nationals may still be entitled to the UK Personal Allowance, while citizens of other countries may not be, meaning their UK income is taxed from the first pound. Non-resident landlords either register under the Non-Resident Landlord Scheme, where letting agents withhold tax, or apply to receive rent gross and settle through Self Assessment. Non-residents disposing of UK property must report the disposal within sixty days of completion.

On National Insurance, voluntary Class 2 contributions may be available if you are self-employed or not working abroad, subject to having lived in the UK for a qualifying period and paid contributions before leaving, and they count towards State Pension qualifying years. If your employer posts you to a country with a social security agreement, apply for a certificate of coverage (the A1 in the EU and EEA) so you pay contributions in only one country. Certificates are typically granted for a limited period and can sometimes be extended, using form CA3837 for the EU and EEA or CA3822 elsewhere.

The foreign income and gains regime and the Temporary Repatriation Facility

The remittance basis was abolished on 6 April 2025, and domicile no longer determines how foreign income and gains are taxed in the UK. New arrivals are now assessed under a residence-based four-year Foreign Income and Gains regime.

Individuals who become UK resident after a long qualifying period of non-UK residence can elect to be taxed only on UK income and gains for their first four tax years of residence, with foreign income and gains arising in that window untaxed in the UK whether or not they are brought here. The election is made annually on the Self Assessment return, and electing in a year costs you the Income Tax Personal Allowance and the Capital Gains Tax annual exempt amount for that year. After the fourth year you are taxed on worldwide income and gains on the arising basis like any other resident.

Former remittance-basis users can use the Temporary Repatriation Facility to bring pre-6 April 2025 unremitted foreign income and gains into the UK at a reduced flat rate for a limited window, after which those funds are taxed normally on remittance. It is a one-time opportunity, designated through the Self Assessment return, and mixed funds need careful tracing. Existing residents who do not qualify for the four-year regime are taxed on the arising basis, with transitional reliefs including the TRF and a one-off rebasing of foreign assets where conditions are met.

Leaving, arriving, and multi-currency income

On leaving the UK: complete form P85 to tell HMRC you are going abroad, which helps settle your residency position and may trigger a refund; notify HMRC if you have ceased trading; file a Self Assessment return for the year of departure claiming split year treatment if eligible; and consider whether to deregister for VAT or appoint a UK VAT representative.

On arriving: register for Self Assessment if you have self-employment income, foreign income or other reportable income; apply for a National Insurance number if you do not have one; notify HMRC of your arrival and expected income sources; and consider VAT registration if your new business is likely to pass the registration threshold.

Foreign currency income must be converted to sterling. HMRC accepts the spot rate on the date of receipt or payment, its published monthly rates, or its yearly average rate, and you should apply one method consistently. For Income Tax, individuals do not usually have separately taxable exchange gains or losses, but for Capital Gains Tax the acquisition cost and disposal proceeds of foreign-currency assets are each converted at the relevant rate and the gain is calculated in sterling. Keep records of the rates and dates you used, since HMRC may query them.

Common questions