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Do I Have to Pay UK Tax on Foreign Income?

September 2021

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.

Photo of Calculator Surrounded by Foreign Currency

How does HMRC define a UK resident?

According to the gov.uk website;

You’re automatically a resident if either:

You’re automatically a non-resident if either:

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:

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.

2 thoughts on “Do I Have to Pay UK Tax on Foreign Income?

  1. Toby Chan says:

    Hi, i have few questions about foreign income tax (rental income and house selling).
    i am from hong kong and i am going to immigrate to UK. I have a joint named property with my dad in Hong Kong, it has been rented and the rental income are under my dad bank account and not share by me. Do i need to pay any tax in UK?

    second question, for example, my dad bought this property 30 yrs ago with 60K and i jointed name with him on this year, and the market value of it becomes 400K now. if we sell this property, how to calculate my foreign income tax? how to calculate the profit of it make, is it based on the date i was jointed with my dad?

    many thanks

    1. Aston Shaw says:

      Dear Toby,

      Thank you for your enquiry, I suggest we arrange a mutually convenient time to speak as the situation you have described will have many variables which will need to be considered.

      In the briefest of terms, UK residents are taxed on their UK and worldwide income, whereas non-residents will only be taxed upon their UK income within the UK tax system.

      With respective to the capital gain on the property jointly owned with your father, you would calculate the gain as the difference between the value of your share when it was sold/given away and the value when you acquired it. You may have also incurred professional fees which are relevant, or made capital improvements (extensions and alike) to the property which would affect the calculation.

      These are both areas we would be happy to support you in understanding and complying with the UK requirements.

      Kind Regards,

      Aston Shaw

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