Tax on UK income or capital gains for non-UK residents

If you are not UK resident you might still have to pay UK Income Tax and Capital Gains Tax on your UK income or capital gains. The rules are the same whether you became non resident when you moved from the UK to live or work full time abroad, or whether you have always been based abroad but have UK income or gains.

Where there is a double taxation agreement between the UK and your country of residence, you won't normally have to pay tax twice on the same income.

On this page:

Your residence position and how it affects tax

Income Tax

If you have left the UK to live or work full time abroad and are no longer UK resident, you might still be liable to pay tax on income from the UK.

The same rule applies if you have never been resident in the UK but have income in or from the UK. To check whether you're UK resident or not, follow the link below.

Meaning of residence and how it affects your tax

Capital Gains Tax

In general you will not be liable to pay tax on capital gains if you are not resident in the UK but there are exceptions. Read more in the section 'Tax on capital gains from assets in the UK' later in this guide.

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Tax on your earnings

Working partly in the UK

If you're not UK resident, but work partly in the UK, you will pay UK tax on the part of your earnings allocated to your UK work. You can usually allocate your earnings by looking at the number of days you work in the UK and the number of days you work outside of the UK, where the work is of the same type in both countries.

The exception is where your work in the UK is considered to be 'merely incidental' to your overseas work, for example you are coming to the UK for a short period of training or to receive fresh instructions. Your work in the UK cannot be 'merely incidental' if it is substantial in time or nature or of the same type as the work you carry out abroad. If all your work in the UK is 'merely incidental' then all your income is treated as foreign income and is not taxed in the UK.

If you're employed in the UK, your employer or the person you work for may have to operate Pay As You Earn (PAYE - where tax is deducted from your wages). If you're self-employed for part of the year in the UK, you will have to complete a Self Assessment tax return at the end of the year. Find out more in the guides below.

Tax for the employed

Tax returns for the self-employed

Special rules for certain employees

There are special rules for:

  • Crown employees
  • seafarers
  • oil and gas workers
  • entertainers and sportspeople
  • students

Follow the links below to find out more.

UK employees working overseas in specialist sectors

Entertainers and Sportspeople

Students working in the UK

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Tax on other types of income

Pensions if you're not resident in the UK

If you're not resident in the UK, you might still be liable to pay tax on pensions from schemes within the UK. You will not have to pay UK tax on pensions paid from schemes outside the UK.

Tax on UK government service and local authority pensions

Wherever you live, you'll usually pay UK tax on a UK government service or local authority pension. But, there are certain countries, which, if you are resident there, the UK government service or local authority pension may be exempted from UK tax. The UK government or local authority may be taxed in the country in which you are resident

UK Government pensions

Annuities if you're not resident in the UK

If you're not resident in the UK, you will still be liable to pay tax on income from a retirement annuity.

Retirement Annuities paid to Non-Residents - FAQs

Savings and investment income (except rental income)

Savings and investment income includes:

  • interest from bank and building society accounts
  • dividends on shares
  • interest on stocks

If you're not resident in the UK, you might still be liable to pay UK tax on any savings or investment income from UK sources. But the amount of tax you pay is limited to the amount deducted 'at source' before you receive the income - you don't need to complete a tax return to tell HM Revenue & Customs (HMRC) about this. You will not have to pay UK tax on investment income from sources outside the UK.

Most banks and building societies in the UK deduct UK tax from the interest before they pay it to you. If you're not ordinarily resident (you normally live outside the UK), you might be able to get your interest without tax deducted by giving form R105 'Application for a not ordinary resident saver to receive interest without tax taken off' to your bank or building society. Whether you can do this will depend on the terms and conditions of the account and whether or not your bank or building society offers this option.

Go to form R105 'Application for a not ordinarily resident saver to receive interest without tax taken off'

Tax on bank and building society accounts

Tax on UK dividends

Rental income from property in the UK

If you're not resident but still receive rental income from the UK, you will pay UK tax on that income.

This type of income is dealt with by HMRC Non-resident Landlord Scheme. The scheme requires either your tenant or your letting agent to deduct basic rate tax from the rental income they pay to you if your usual home is outside the UK. You may need to complete a tax return to tell HMRC about the rental income and the tax already paid. You can make an application to receive rental income with no tax deducted when the rental income is paid to you but you will still be liable for the tax due . Find out more in the guide below.

The Non-resident Landlord Scheme

UK Government securities

All UK Government securities are considered 'Free of Tax to Residents Abroad' (FOTRA). If you are not resident in the UK, you will not pay UK tax on the interest that arises from FOTRAs - unless the interest received forms part of a trade or business which is carried out in the UK.

UK Government FOTRA securities

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Tax on capital gains from assets in the UK

If you're not resident in the UK, whether you pay Capital Gains Tax on UK assets will depend on a number of factors:

  • if you have previously lived in the UK, and if so, when you left the UK, the period of time you were resident in the UK before your departure and the length of time you live abroad
  • whether you are still ordinarily resident (only for tax years up to and including 2012-13) in the UK - that is, your normal home is the UK
  • whether the assets are held for the purpose of carrying out work through a UK branch or agency

For more information on Capital Gains Tax, follow the link below.

Introduction to Capital Gains Tax

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Double taxation agreements

If you're not resident in the UK, the country you live in might want to tax you on your worldwide income - even if tax is due in the UK. But if it has a double taxation agreement with the UK you won't normally have to pay tax twice on the same income.

Double taxation agreements - an introduction

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Tax-free allowances for non-residents

If you're a European Economic Area citizen (including British), or a current or former Crown employee, you will get the UK Personal Allowance to reduce the amount of UK Income Tax due. If you are a Commonwealth citizen you will only get the Personal Allowance for tax year 2009-10 and earlier years. You may still qualify in later tax years depending on the relevant double taxation treaty with the UK. Members of certain other special groups also qualify - see part 5 of the 'RDR1 - Residence, domicile and the remittance basis' guidance notes and part 6 of the booklet HMRC6 'Residence, Domicile and the Remittance Basis'.

'RDR1 - Residence, domicile and the remittance basis' is a guide for residents and non-residents on the residence, domicile and remittance basis rules for tax years 2012-13 onwards. It replaces the booklet HMRC6.

RDR1 - Residence, domicile and the remittance basis

HMRC6 - 'Residence, domicile and the remittance basis' should be used for information on rules affecting your tax liability in the UK up to the end of tax year 2012-13 only

HMRC6 - Residence, domicile and the remittance basis

Personal Allowance

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