We get asked this question a lot. So often in fact that we decided it’s a subject worth covering in a blog. In most cases, there is a simple answer to this question. If you are not a UK resident, you won’t need to pay tax in the UK. If you are a UK resident, you will indeed have to pay tax on your foreign income. However, you may not have to if your permanent home is abroad.
How does HMRC define a UK resident?
According to the gov.uk website;
You’re automatically a resident if either:
- you spent 183 or more days in the UK in the tax year
- your only home was in the UK – you must have owned, rented or lived in it for at least 91 days in total – and you spent at least 30 days there in the tax year
You’re automatically a non-resident if either:
- you spent fewer than 16 days in the UK (or 46 days if you have not been classed as UK resident for the 3 previous tax years)
- you work abroad full-time (averaging at least 35 hours a week) and spent fewer than 91 days in the UK, of which no more than 30 were spent working
Which types of foreign income might you need to pay tax on?
You may need to pay UK Income Tax on foreign income, such as:
- Wages (earned abroad)
- Foreign investments and savings interest
- Rental income on overseas properties
- Income from pensions held abroad
Foreign income is classed as anything from outside England, Scotland, Wales and Northern Ireland.
Everyone’s situation is different though and if you are still unsure as to where you stand, we recommend you get in touch. In some cases, the answer isn’t so obvious.
If you are taxed in more than one country, you may be able to claim tax relief – something we can help you with.
