Do I need to File a UK Tax Return If I Live Abroad?
Moving to a different country can mark significant changes, not only in the way you live but in the way you manage your tax returns. Let's take a closer look at this topic to help you understand your UK tax obligations having moved abroad.
What Does “Non-Resident” Mean?
Being “non-resident” for UK tax purposes means you typically don’t pay UK tax on income or gains earned outside the UK. However, UK tax may still apply to income that originates in the UK, such as rental income, pensions, or wages from UK employment.
To be considered non-resident, you generally must:
- Spend fewer than 16 days in the UK during a tax year (or fewer than 46 days if you haven’t been a UK resident for the previous three years).
- Work full-time overseas, spending fewer than 91 days in the UK, and work no more than 30 of those days in the UK.
It’s possible to be tax resident in more than one country, known as “dual residence,” in which case you might have to pay tax on your UK income in both countries. However, if there's a double taxation agreement between the UK and the country where you live, you might be eligible for tax relief to avoid being taxed twice.
What Income Is Taxable in the UK?
As a non-resident, you generally won’t pay UK tax on foreign income or gains. However, the following types of UK income may still be taxable:
Rental Income: If you rent out property in the UK, this income is always subject to UK tax, regardless of your residence status.
UK Employment Income: Any wages earned from work done in the UK are taxable in the UK.
Pension Income: UK private pension payments may be taxable, especially if you were a UK resident within the last five years.
Savings Interest and Investments: Although interest on savings is no longer automatically taxed, you must report it if it’s taxable.
Certain types of income are exempt from UK tax for non-residents, such as the State Pension or interest from UK government securities (gilts).
Will You Get Your Personal Allowance?
Non-residents may still qualify for the UK Personal Allowance—the amount of income you can earn tax-free each year—if you are a British citizen, a citizen of a European Economic Area country, or if your country has a double taxation agreement with the UK that includes the Personal Allowance.
For the tax year 2023/2024, the Personal Allowance is £12,570. If your total UK taxable income exceeds this amount, you will be taxed according to the UK tax bands, which range from 20% to 45%.
How to Report Your Taxable UK Income to HMRC
If you receive taxable income from the UK while living abroad, you usually need to file a Self Assessment tax return (SA100) along with the SA109 form, which details your residence status. Depending on your income sources, you may also need to file supplementary forms:
- SA105 for rental income.
- SA103 for self-employment income.
- Other supplementary pages depending on the type of income received.
If you haven’t filed a Self Assessment tax return before, you must register with HMRC by 5 October following the end of the tax year in which you earned taxable UK income. The deadline for filing your Self Assessment online is 31 January of the following year. Failing to register or file on time may result in penalties.
What If You Don’t Pay UK Tax on Your UK Income?
If HMRC finds that you haven’t reported UK taxable income, you will not only have to pay the unpaid tax but may also face penalties and interest charges. Penalties can be severe, potentially up to twice the amount of the undeclared tax.
If You’re Taxed Twice
If you are taxed in both the UK and your country of residence, you may be able to claim tax relief under a double taxation agreement. These agreements are in place to ensure you don’t pay tax twice on the same income. You may need to complete additional forms, such as HS302 or HS304, to claim this relief.
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