Relocating abroad often feels like a fresh start, but when it comes to tax obligations, many British expats face unexpected complexities. Moving overseas doesn’t automatically remove you from the reach of UK tax rules. Whether you’re enjoying retirement abroad, working on an international assignment, or simply starting a new life in another country, understanding your tax responsibilities remains essential.
Your residence status, the concept of domicile, and whether you continue earning UK income all influence your tax position. This series outlines the core elements every expat must consider, starting with how residence is determined and how domicile status affects your UK tax liability.
Why Tax Responsibilities Continue When You Move Abroad
It’s a common belief that moving abroad exempts a person from UK tax obligations. While certain liabilities might reduce or change, a complete exit from UK tax rules depends on your unique situation. British nationals who continue to receive UK income or who still maintain ties to the country often find themselves subject to reporting requirements long after departure.
This is especially true if you rent out property in the UK or have other UK-based investments. Even if you become non-resident for tax purposes, specific UK income remains taxable under domestic law. Moreover, global tax agreements mean some foreign income might need to be declared, depending on your residency and the country you reside in.
Understanding how residence and domicile work is key to avoiding errors in your filings and ensuring compliance with UK regulations. HMRC assesses both to decide what income you must report and how much tax, if any, is owed.
Establishing Your Residency Status
Tax residency in the UK is governed by the Statutory Residence Test. It’s a detailed framework designed to determine your status based on days spent in the UK, connections to the country, and overseas work patterns. Residence status is assessed annually, meaning it can change year to year depending on your circumstances.
Automatic UK Residency Conditions
You will automatically be considered a UK resident if either of the following applies in a given tax year:
- You spend 183 days or more in the UK
- Your only home is in the UK, and you lived in it for at least 30 days during the tax year, with the property available to you for at least 91 days
Even if you split time between multiple homes in different countries, the nature of your main home and your pattern of presence in the UK will determine your tax treatment.
Automatic Overseas Residency Conditions
On the other hand, you may automatically be classed as a non-resident if:
- You were present in the UK for fewer than 16 days in the tax year
- You spent fewer than 46 days in the UK and were not a UK resident for the previous three tax years
- You worked abroad full-time (at least 35 hours per week on average), were in the UK for fewer than 91 days, and worked no more than 30 days in the UK during the year
These tests are quantitative, but additional ties to the UK — such as having a UK-resident spouse or minor child, a UK home, or substantial time spent here in prior years — can also affect the outcome if the automatic conditions are not met.
Role of Ties and the Sufficient Ties Test
If you do not meet any of the automatic conditions, the sufficient ties test applies. This test considers a combination of factors such as:
- Family ties
- Accommodation ties
- Work ties
- 90-day ties (spending 90 days or more in the UK in either of the last two years)
- Country ties (whether the UK was your most frequent location)
The more ties you have, the fewer days you need to spend in the UK to be considered a resident. This test underscores how lifestyle choices and personal circumstances impact your tax obligations.
Implications of Being a UK Resident
If you are classed as a UK resident for tax purposes, your liability includes tax on both UK and foreign income. This includes:
- Earnings from employment or self-employment abroad
- Rental income from overseas property
- Interest and dividends from international investments
- Foreign pensions or annuities
This worldwide scope can catch many expats off guard. Even income earned and retained abroad may be subject to UK tax unless relief or exemptions apply. Depending on your domicile status, you may be able to claim special treatment for foreign income, but this must be declared and applied for properly.
Understanding Domicile and Its Effect on Tax
Unlike residency, which is based on your presence and activities in a specific tax year, domicile is a long-term concept based on your permanent home. It plays a vital role in determining the extent to which foreign income, capital gains, and inheritance are taxed by the UK.
What is Domicile?
Your domicile is typically the country your father considered his permanent home when you were born. This is known as your domicile of origin. Changing this to another country — called acquiring a domicile of choice — is possible, but it’s difficult and requires strong evidence that you intend to reside permanently in your new country.
You must demonstrate that you’ve cut substantial ties with the UK and established long-term roots elsewhere. Owning UK property, maintaining a UK bank account, or having family in the UK can complicate this claim.
Why Domicile Matters
If you remain UK-domiciled, you may be subject to tax on your worldwide income even when you are non-resident. You are also liable to UK inheritance tax on your global estate. However, if you are not domiciled in the UK and do not bring your foreign income into the UK, you may be able to use the remittance basis of taxation. This can allow you to defer or avoid UK tax on foreign income, though there are implications such as potential loss of allowances and, in some cases, an annual charge for long-term residents.
The Remittance Basis and How It Works
The remittance basis is an alternative method of taxation available to non-domiciled individuals. Under this system, you are only taxed on your foreign income or gains if they are brought (or remitted) into the UK. This can be an attractive option, especially if your foreign income is substantial and you do not need to transfer funds into the UK.
However, using the remittance basis means forfeiting your entitlement to certain personal allowances and tax-free thresholds. For individuals who have been UK residents for seven out of the last nine tax years, there is an annual charge to use this system. The charge increases the longer you reside in the UK while remaining non-domiciled.
Documentation is essential if you intend to use the remittance basis. HMRC requires a clear breakdown of income and any funds transferred into the UK. Without sufficient records, disputes and penalties can arise.
Split Year Treatment: Dividing Residency Within a Tax Year
If you move abroad partway through the tax year, you may qualify for split year treatment. This allows your tax year to be split into a resident part and a non-resident part, depending on your circumstances. This treatment can significantly reduce your UK tax bill by excluding foreign income earned after your departure.
There are eight scenarios under which you can claim split year treatment, including starting full-time work abroad or accompanying a partner who is working overseas. You must still complete a Self Assessment tax return and submit supplementary forms detailing your split year claim.
What Happens if You Return to the UK
Returning to the UK, even temporarily, can impact your tax status. Depending on how long you’ve been away and your activities during the absence, you might immediately resume UK residency. You must assess your status each year and report accordingly. In some cases, foreign income earned before returning might still be taxable under UK law if conditions aren’t met for split year treatment or non-residency.
Double Taxation Relief for Expats
To prevent double taxation, the UK has treaties with many countries. These agreements determine which country has the right to tax specific types of income and provide relief to ensure you’re not taxed twice. You may receive credits for taxes paid abroad or exemptions from UK tax on certain income.
To benefit, you must understand the treaty provisions and provide evidence when filing your UK tax return. The relevant form for declaring foreign income and claiming relief is SA106. It’s essential to have records of foreign tax payments, income sources, and relevant treaty references.
Staying Compliant with Changing Rules
Tax regulations for expats can shift frequently. Over recent years, amendments have included changes to capital gains tax for non-residents, restrictions on mortgage interest relief for landlords, and evolving rules on domicile status.
Staying informed is crucial, especially when living outside the UK. Subscribing to updates from HMRC, reading official guidance, and consulting with a tax adviser can help ensure you’re always working with the most up-to-date information.
After understanding your residency and domicile, the next priority for many British expats is managing UK-sourced income — particularly rental income from UK property. Special rules apply to non-resident landlords, including obligations under the Non-Resident Landlord Scheme and the process of filing a Self Assessment tax return from abroad.
Navigating the Rules as a Non-Resident Landlord
When you move abroad and keep a property in the UK that you rent out, you must understand your tax responsibilities under the UK system. Being a non-resident doesn’t exempt you from paying tax on your UK rental income. Instead, it creates a specific set of obligations under what is known as the Non-Resident Landlord Scheme.
This guide explains how the scheme works, how you need to report your income, which forms you must complete, and what practical steps you should take to stay compliant. Renting out property while living overseas can be financially rewarding, but it does come with added administrative duties that must not be ignored.
Who Qualifies as a Non-Resident Landlord
Even if you are considered a UK resident for tax purposes, you are treated as a non-resident landlord if you live outside the UK for six months or more in any given tax year. This classification doesn’t depend on your formal residence status but rather your physical presence and location during the year.
If you fit this description and receive rental income from property located in the UK, you fall under the scope of the Non-Resident Landlord Scheme. This includes British nationals who have moved abroad but retain property in the UK for rental purposes.
This scheme ensures that tax is collected on UK rental income before the funds reach the landlord. Either the tenant or letting agent is responsible for deducting the basic rate of tax and sending it to HMRC, unless you have permission to receive gross rental income and manage your tax obligations directly.
How the Non-Resident Landlord Scheme Works
The Non-Resident Landlord Scheme is designed to ensure that rental income does not go untaxed simply because the landlord is living abroad. Under the scheme, there are three potential parties involved in the process: HMRC, the letting agent (if applicable), and the tenant.
Letting agents and tenants who are paying rent to a landlord they know to be living outside the UK for six months or more are required by law to withhold tax at the basic rate before passing the remainder on to the landlord. They must also provide a certificate confirming the tax that has been deducted.
Letting agents, in this case, are not limited to professionals. A friend or family member who manages the property on your behalf can be regarded as a letting agent, provided they handle responsibilities such as collecting rent, arranging repairs, or liaising with tenants. These agents must register with HMRC and fulfil their obligations under the scheme.
Applying to Receive Gross Rental Income
If you prefer to handle your own tax affairs, you can apply for permission to receive your rental income in full, without tax being deducted at source. To do this, you must submit a request to HMRC using a specific application form. If approved, you will still need to report the income through Self Assessment and pay any tax due directly.
Once your application is accepted, HMRC will notify your letting agent or tenant that they may pay your rent without deducting tax. This simplifies cash flow but places full responsibility on you to ensure tax is calculated and paid correctly.
This approach is often preferred by landlords with experience managing their own finances or those using software or accountants to assist with compliance. It allows for the deduction of allowable expenses and ensures greater accuracy in calculating the actual tax due.
Registering for Self Assessment as a Non-Resident
If you earn income from renting out UK property while living overseas, you must register for Self Assessment with HMRC. Even if tax is already being deducted at source, registration is still required to ensure proper reporting and reconciliation of your income and expenses.
Registration should be completed well in advance of the Self Assessment deadline. Once registered, you will be issued a Unique Taxpayer Reference number and required to file an annual tax return. Keep in mind that the filing rules are different if you live abroad, and you may not be able to use HMRC’s basic online system.
Instead, non-resident landlords often need to file paper returns or use commercial tax software that supports digital submission of the necessary forms. Early planning helps avoid delays and ensures compliance with all submission requirements.
Completing the Correct Self Assessment Forms
As a non-resident landlord, your Self Assessment return must include specific supplementary forms. The core SA100 form is accompanied by:
- SA105 for UK property income
- SA109 for residence and domicile information
You may also need to complete SA106 if you have any foreign income that falls under the UK tax regime. Each form plays a role in providing HMRC with the full picture of your earnings and tax position.
SA105 – UK Property Income
This form is used to declare all income received from UK property. You must include:
- The total rent received
- Expenses related to the rental, such as maintenance, insurance, or letting fees
- Capital allowances for furnishings or equipment
- Any periods when the property was vacant
- Losses carried forward from previous years
The form ensures HMRC knows the gross and net income from your property and allows for the appropriate calculation of tax owed.
SA109 – Residence and Domicile
The SA109 form covers your residence and domicile status, including:
- Whether you are eligible for split year treatment
- The date you left the UK
- The number of days spent in the UK during the tax year
- Whether you wish to claim personal allowances as a non-resident
- Details of your domicile and any change to it
This form is essential for any expat claiming split year treatment or asserting a non-domicile status, as it directly affects how other parts of your tax return are assessed.
SA106 – Foreign Income
If you also have income from sources outside the UK that needs to be reported to HMRC, the SA106 form will be necessary. This includes:
- Interest from overseas bank accounts
- Dividends or capital gains from foreign investments
- Foreign pensions or social security income
- Income from overseas employment
- Royalties and trust distributions
- Claims for foreign tax credit relief
If foreign income is brought into the UK or falls under UK tax rules due to your domicile, full disclosure through this form is required.
Role of Split Year Treatment
When leaving the UK partway through the tax year, you may qualify for split year treatment. This designation allows HMRC to treat your tax year as divided between a period of UK residence and a period of non-residence.
This is especially relevant for non-resident landlords who began renting property after moving abroad. Under split year rules, any foreign income earned after departure might not be taxable in the UK. However, rental income from UK property continues to be subject to UK tax throughout.
Applying for split year treatment involves demonstrating eligibility through detailed records of your departure, international work or relocation, and confirmation of your status in the new country of residence.
Understanding Tax-Free Allowances
As a non-resident, you may still be eligible for the UK Personal Allowance, which permits a portion of your income to be earned tax-free. However, eligibility depends on various factors, including your nationality, country of residence, and any relevant tax treaties.
British citizens typically retain access to the Personal Allowance, but if you’re a non-resident from another country, eligibility may vary. The SA109 form allows you to declare your entitlement and ensures HMRC applies the allowance correctly to your rental income.
If your rental income is below the allowance threshold and you have no other taxable income, you may not owe any tax, though you are still expected to submit a tax return if registered for Self Assessment.
Claiming Expenses Against Rental Income
One of the key advantages of filing your own return rather than relying solely on tax deducted at source is the ability to claim legitimate expenses. These may include:
- Repairs and maintenance
- Ground rent and service charges
- Mortgage interest
- Letting agent fees
- Building and contents insurance
- Accounting and legal fees
- Utility bills and council tax (if paid by the landlord)
Keeping accurate records and invoices is crucial. HMRC may request supporting documentation if they review your return. Expenses should only be claimed for periods when the property was available for rent, and any personal use of the property must be excluded.
Capital Allowances and Replacement Relief
If you provide furnishings or equipment in a rental property, you may be able to claim capital allowances or replacement relief. These cover the cost of buying, replacing, or improving items like white goods, furniture, or tools.
The rules differ depending on whether the property is furnished or unfurnished and whether the items are replacements or new additions. Claiming these correctly can reduce your tax bill and is part of the SA105 property income section.
Deadlines and Payment Dates
Key Self Assessment deadlines apply even if you are overseas. The important dates include:
- 5 October: Deadline to register for Self Assessment
- 31 October: Deadline for submitting paper tax returns
- 31 January: Deadline for online tax returns
- 31 January: Deadline for payment of tax owed
- 31 July: Second payment on account (if applicable)
Missing these deadlines can result in penalties and interest. Filing early is advisable, especially when additional documents or residency declarations are involved.
Applying for Tax Refunds
If you’ve overpaid tax, either because of deductions at source or because your income falls within your Personal Allowance, you can apply for a refund. This may be done by completing the R43 form or through your Self Assessment return.
A refund may also be due if allowable expenses or losses reduce your taxable income. Refunds can be paid to a UK or foreign bank account, provided HMRC has verified your identity and account details.
Beyond Rental Income: Additional UK Tax Responsibilities Abroad
Living overseas may change the way your tax obligations are calculated, but it doesn’t remove them entirely. For many British expats, tax liability extends beyond property rental income and into areas such as capital gains, savings and investments, pensions, and foreign income that remains taxable under UK law.
Understanding how these obligations evolve over time is key to staying compliant. Even if you have successfully managed your Self Assessment filing as a non-resident landlord, other areas of the UK tax system may still apply to your situation. We explore ongoing responsibilities, key forms, capital gains tax rules for non-residents, and how tax treaties affect your liability.
Additional Income Sources That May Be Taxable
British expats are often surprised to learn that several forms of income remain taxable in the UK despite residing abroad. If you are deemed a non-resident for tax purposes but continue to receive any of the following, you may still have an obligation to report and pay tax:
- Dividends from UK companies
- Interest from UK-based savings accounts or ISAs
- UK pensions or annuities
- Employment or self-employment income linked to UK work
- Capital gains on UK property sales
- Partnership income from UK-based businesses
The extent to which these are taxable depends on your residency and domicile status, as well as any double taxation treaties between the UK and the country you now live in. Each category of income should be reviewed carefully to determine whether reporting is required under Self Assessment.
How Capital Gains Tax Applies to Expats
In recent years, the UK has expanded its rules around capital gains tax (CGT) for non-residents. Previously, those who were non-resident for five or more tax years could sell UK property without being liable to pay CGT. However, since changes introduced in 2015 and 2019, this is no longer the case.
Now, non-residents must pay capital gains tax on disposals of UK residential and non-residential property, as well as land. This applies regardless of how long you have lived abroad or your domicile status.
Reporting a Capital Gain as a Non-Resident
If you sell a UK property while living overseas, you must report the disposal to HMRC within 60 days of completion, using a special online system. If a gain arises, CGT must also be paid within the same 60-day window.
This is separate from your annual Self Assessment tax return and must be done even if no tax is due (for example, if the sale results in a loss or you qualify for full relief). The gain is calculated using the market value at April 2015 as the base cost for residential property, or April 2019 for non-residential property, unless you opt to use another method.
Any unused annual exemption can still be applied, and the applicable CGT rate depends on your total UK income and whether the property was residential (18% or 28%) or commercial (10% or 20%).
When Lettings Relief or PPR May Still Apply
If the property being sold was your main residence at any time, you may qualify for Principal Private Residence Relief (PPR) or lettings relief. However, PPR is only available for periods when you were actually living in the property or for qualifying absences.
Claiming these reliefs can reduce or eliminate the gain subject to CGT, but documentation is critical. You must retain records showing periods of occupation, letting agreements, and any improvements made to the property.
Reporting Foreign Income to HMRC
Even when living abroad, you may need to report foreign income to HMRC. This includes:
- Interest and dividends from non-UK investments
- Income from property held abroad
- Overseas pensions or social security payments
- Royalties, trust income, and freelance work carried out abroad
- Business income from overseas sources
If you are a UK resident and domiciled in the UK, you are taxed on worldwide income. If you are non-domiciled and claim the remittance basis, only income brought into the UK is taxed, though this affects your entitlement to allowances and may result in a remittance charge if you have lived in the UK for several years.
The foreign income pages of the Self Assessment return (SA106) must be completed accurately, including any claims for Foreign Tax Credit Relief, which can offset tax already paid to another country.
How to Claim Relief Under a Double Taxation Agreement
The UK has double taxation agreements with many countries to prevent individuals from being taxed twice on the same income. These treaties determine where you should pay tax on different types of income and often allow a credit against UK tax for foreign tax already paid.
For example, if you are receiving pension income that has been taxed in your country of residence, the UK treaty may permit you to exclude that income from your UK return or claim credit to avoid paying tax again.
To make a claim, you must complete the relevant sections of SA106 and include details of the foreign tax paid. Supporting documents such as tax certificates or translated statements may also be required. In some cases, you may need to file a claim with the overseas tax authority to reduce or reclaim local tax withheld under the terms of the treaty.
Claiming Personal Allowance as a Non-Resident
British citizens living abroad can usually claim the UK Personal Allowance, which allows you to earn a set amount each tax year without paying tax. This is especially useful for non-resident landlords and pensioners.
Eligibility is often retained for nationals of the European Economic Area, certain Commonwealth countries, and individuals covered by specific tax treaties. You must declare your intention to claim the allowance using the SA109 residence form when submitting your Self Assessment return.
If your UK income falls within the Personal Allowance threshold, you may not owe tax. However, the income must still be reported. If you fail to file a return when required, penalties and interest could still be applied even when no tax is due.
Keeping Accurate Records
Whether you’re dealing with UK property, foreign pensions, or business income, keeping accurate records is essential for expats. HMRC requires that all Self Assessment entries be supported by documentation in the event of a review or audit.
You should retain:
- Tenancy agreements and rent statements for UK property
- Expense receipts and invoices for allowable deductions
- Evidence of foreign tax paid
- Dates of entry to and exit from the UK for residency assessment
- Bank statements showing transfers into the UK (for remittance basis)
- Valuations and contracts related to property sales
Records must usually be kept for at least five years after the filing deadline. If your return is late or under investigation, the requirement may be extended. Digital records are acceptable, but they must be clear, retrievable, and accurate.
Planning Ahead for Inheritance Tax
Domicile plays an important role in inheritance tax (IHT) planning. Even if you are non-resident, if you remain UK-domiciled, your worldwide estate may be subject to IHT. This includes foreign property, savings, and investments.
Individuals who become domiciled in another country may eventually escape this wide scope, but the rules are complex. For instance, even if you acquire a foreign domicile, the UK may continue to treat you as deemed domiciled for up to 15 years of residence out of the last 20 years.
British expats with significant overseas assets should consider:
- Reviewing their will to ensure it aligns with UK and foreign laws
- Seeking specialist IHT advice for trusts, gifts, and lifetime planning
- Declaring assets accurately in the event of death or gifting
- Ensuring that their domicile status is properly documented
Double taxation treaties on inheritance may also affect the outcome and reduce the overall tax burden for your estate.
Managing Compliance with UK Tax Deadlines
UK tax deadlines apply regardless of where you are living. As an expat, you must still:
- Register for Self Assessment by 5 October after the end of the tax year
- File paper tax returns by 31 October
- Submit online tax returns by 31 January
- Pay any tax owed by 31 January (and 31 July for payments on account)
Missing these deadlines triggers automatic penalties. Interest charges apply to late payments, and continued non-compliance may lead to HMRC opening an investigation. The best way to stay on top of your obligations is to file early and keep a calendar of key dates.
If you’re unsure whether you need to file, it’s always better to check than assume. Even if you don’t owe tax, the requirement to report may still apply, especially if you’re registered for Self Assessment.
Seeking Support Where Necessary
Tax laws are continually evolving. Whether it’s capital gains tax changes, new definitions of residence, or updated treaty provisions, staying compliant means staying informed. If your affairs become more complex due to cross-border income, multiple properties, or changes to your residency, seeking support from a qualified adviser may be worthwhile.
In many cases, expats can manage their own returns with diligence, careful record keeping, and the correct use of HMRC guidance and forms. However, cross-border tax planning is an area where professional advice can save money and prevent costly errors.
Conclusion
Moving abroad may seem like a clean break from UK life, but when it comes to tax responsibilities, that separation is rarely simple. As a British expat, especially one with income from UK property or other sources within the UK, it’s crucial to maintain a clear understanding of how residence, domicile, and income types affect your tax obligations.
The first step is always establishing your residence status. This foundational element influences everything from how much of your income is taxable to which forms you must complete during Self Assessment. But it doesn’t stop there. Even if you’re classified as non-resident, you may still be liable for UK tax on rental income, capital gains on UK property, and other sources of income arising from the UK.
If you’re a non-resident landlord, you need to be aware of the Non-Resident Landlord Scheme and understand how your rental income is taxed whether it’s handled by a letting agent or tenant, or managed by you directly through HMRC. Submitting the correct Self Assessment forms, such as SA105 for property income and SA109 for residence and domicile, is critical for compliance.
Beyond property, many expats encounter ongoing obligations related to pensions, investments, capital gains, and foreign income. These often require additional forms, detailed record-keeping, and knowledge of any double taxation agreements that may protect against being taxed twice on the same income.
The complexity of these rules should not deter you from ensuring full compliance. With the right information and approach, British expats can confidently navigate the Self Assessment process, claim the correct allowances and reliefs, and minimise their risk of penalties or unexpected tax bills. Whether you’re handling your returns yourself or with support, staying organised and proactive will make all the difference. By understanding your responsibilities clearly, maintaining accurate records, and filing on time, you can fulfil your obligations to HMRC while continuing to enjoy the benefits of life abroad.