Tax on your UK income if you live abroad

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1. Overview

You usually have to pay tax on your UK income even if you’re not a UK resident. Income includes things like:

  • pension
  • rental income
  • savings interest
  • wages

If you’re eligible for a Personal Allowance you pay Income Tax on your income above that amount. Otherwise, you pay tax on all your income.

The country where you live might tax you on your UK income. If it has a ‘double-taxation agreement’ with the UK, you can claim tax relief in the UK to avoid being taxed twice.

You do not normally pay tax when you sell an asset, apart from on UK property or land.

When tax is not due or is already deducted

Non-residents do not usually pay UK tax on:

  • the State Pension
  • interest from UK government securities (‘gilts’)

If you live abroad and are employed in the UK, your tax is calculated automatically on the days you work in the UK.

Income Tax is no longer automatically taken from interest on savings and investments.

When to report your income to HM Revenue and Customs (HMRC)

You usually have to send a Self Assessment tax return if:

You do not need to report your income to HMRC if you’ve already claimed tax relief under a ‘double-taxation agreement’.

If you’re a non-UK resident and were stuck in the UK because of coronavirus (COVID-19) between 5 April 2020 and 5 April 2022

You will not have to pay UK tax on employment income if you:

  • earned it between the dates you intended to leave and when you left
  • paid tax on it in your home country

Example You missed your departure flight because you were self-isolating and you worked in the UK until you could rearrange a flight home. As long as you pay tax on your wages in your home country, you will not have to pay tax in the UK.

You must file a Self Assessment tax return, together with a completed SA109 form. Use the ‘other information’ section of your SA109 to include:

  • the dates you were stuck in the UK because of coronavirus
  • what you earned in that time
  • confirmation you paid tax on these earnings in another country

If you’re unsure how to file a Self Assessment return, you can get advice from a professional, like an accountant.

HMRC may ask you for proof that you:

  • could not leave the UK when you intended
  • paid tax in another country on what you earned while stuck in the UK
  • left the UK as soon as you reasonably could

You may have to pay tax in the UK if you cannot prove you were unable to leave the UK and did not leave as soon as you could.

Sending a Self Assessment tax return

You cannot use HMRC’s online services to tell them about your income if you’re non-resident. Instead, you must do one of the following:

You’ll be fined if you miss the deadline - it’s earlier if you’re sending your return by post (31 October).

If you have overpaid

Apply for a refund if you think you’ve paid too much tax. This might happen if tax is deducted automatically (for example by your bank) but your total UK income is below your Personal Allowance.

Send form R43 to HMRC, or claim the refund in your Self Assessment tax return if you’re already doing one.

HMRC will usually send refunds by cheque. If you want HMRC to send a refund straight to your bank account, include your bank account number and sort code on your tax return. You need to include this information each time you complete a tax return.

Get help from a professional (like an accountant) if you need advice.

2. Rental income

You need to pay tax on your rental income if you rent out a property in the UK.

You may also need to pay tax if you make a gain when you sell property or land in the UK.

If you live abroad for 6 months or more per year, you’re classed as a ‘non-resident landlord’ by HM Revenue and Customs (HMRC) - even if you’re a UK resident for tax purposes.

How you pay tax

You can get your rent either:

  • in full and pay tax through Self Assessment - if HMRC allows you to do this
  • with tax already deducted by your letting agent or tenant

Get your rent in full

If you want to pay tax on your rental income through Self Assessment, fill in form NRL1i and send it back to HMRC.

If your application is approved, HMRC will tell your letting agent or tenant not to deduct tax from your rent and you’ll need to declare your income in your Self Assessment tax return.

HMRC will not approve your application if your taxes are not up to date, for example you’re late with your tax returns or payments.

Get your rent with tax deducted

Your letting agent or tenant will:

  • deduct basic rate tax from your rent (after allowing for any expenses they’ve paid)
  • give you a certificate at the end of the tax year saying how much tax they’ve deducted

If you do not have a letting agent and your tenant pays you more than £100 a week in rent, they’ll deduct the tax from their rent payments to you.

Filling in your tax return

You need to declare your rental income in a Self Assessment tax return unless HMRC tells you not to.

You cannot use HMRC’s online services. Instead, you need to:

You need to complete the ‘residence’ section (form SA109 if you’re sending it by post) and the ‘property’ section (form SA105).

You’ll be fined if you miss the deadline - it’s earlier if you’re sending your return by post (31 October).

If you’ve paid too much tax

You can ask for a refund if both:

  • your rental income is lower than your Personal Allowance
  • your letting agent (or tenant) already deducted basic rate tax on it

Fill in form R43 and send it back to HMRC.

You cannot ask for a refund if you’re not eligible for a Personal Allowance.

Companies and trusts

A company is a ‘non-resident landlord’ if it receives income from renting UK property and either:

  • its main office or business premises is outside the UK
  • it’s incorporated outside the UK

Your company will get its rent in full if it’s resident in the UK for tax purposes - this includes UK branches of companies based abroad if they’re registered for Corporation Tax.

A trust is a ‘non-resident landlord’ if it receives income from renting UK property and all trustees usually live outside the UK.

Apply to get your rent in full

Companies should use form NRL2i to ask HMRC to get rental income in full. Trusts should use form NRL3i.

3. Selling or inheriting assets

If you’re not a UK resident, you do not usually pay either:

When you might be taxed

You’ll only have to pay Capital Gains Tax if:

If you inherited the asset

You’ll only have to pay Inheritance Tax if both:

The normal rules for paying Income Tax apply if you get income from something you’ve inherited, for example rental income from a UK property.

If you’re a non-resident and you inherit UK property or land you have to pay tax on any gains you make when you sell it. You do not pay tax if you inherit and sell other assets, for example UK shares.

4. Personal Allowance

You’ll get a Personal Allowance of tax-free UK income each year if any of the following apply:

You might also get it if it’s included in the double-taxation agreement between the UK and the country you live in.

Claim the Personal Allowance

If you’re not a UK resident, you have to claim the Personal Allowance at the end of each tax year in which you have UK income. Send form R43 to HM Revenue and Customs (HMRC).

5. If you're taxed twice

You may be taxed on your UK income by the country where you’re resident and by the UK.

You may not have to pay twice if the country you’re resident in has a ‘double-taxation agreement’ with the UK. Depending on the agreement, you can apply for either:

  • partial or full relief before you’ve been taxed
  • a refund after you’ve been taxed

Each double-taxation agreement sets out:

  • the country you pay tax in
  • the country you apply for relief in
  • how much tax relief you get

If the tax rates in the 2 countries are different, you’ll pay the higher rate of tax. The tax year may start on different days in different countries.

Double taxation agreements do not apply to tax on gains from selling UK residential property.

What income you can claim for

You can claim for income including:

  • most pensions - most UK government (such as civil service) pensions are only taxed in the UK
  • wages and other pay (including self-employment)
  • bank interest
  • dividends - special rules apply, which HM Revenue and Customs (HMRC) explain in section 10 of ‘Residence, Domicile and the Remittance Basis’

How to claim tax relief

Check HMRC’s ‘Double-taxation digest’ for countries that have an agreement with the UK, and how income like pensions and interest is taxed.

You need to look at the relevant tax treaty for the rules on other types of income like wages and rent.

Fill in a claim form

Use the correct form depending on whether you’re resident in:

If you’re resident somewhere else, use HMRC’s standard claim form.

When you’ve filled in the form, send it to the tax authority in the country where you’re resident. They’ll confirm your eligibility and either send the form to HMRC or return it to you to send on (use the address on the form).

There’s a different form for individuals and companies claiming a refund on dividends paid by UK Real Estate Investment Trusts.

If you need help

For help claiming double-taxation relief, you can:

Capital Gains Tax

You only pay Capital Gains Tax if you make a gain on UK property or land. You do not pay it on other UK assets, such as UK shares. You will not usually need to make a claim for assets you do not pay tax on - but you should check the relevant double taxation agreement.

If you return to the UK after being non-resident, you may have to pay tax on any assets you owned before you left the UK - even if you’ve paid tax on any gains in the country you moved to. You can usually claim double-taxation relief.

Dual residents

You can be resident in both the UK and another country (‘dual resident’). You’ll need to check the other country’s residence rules and when the tax year starts and ends.

HMRC has guidance for how to claim double-taxation relief if you’re a dual resident.

6. If you're a UK resident

You can live abroad and still be a UK resident for tax, for example if you visit the UK for more than 183 days in a tax year.

Pay tax on your income and profits from selling assets (such as shares) in the normal way.

You usually have to pay tax on your income from outside the UK as well.