You may need to pay UK Income Tax if you have foreign income, such as:
- Salary if you work abroad
- Foreign investments and saving interest
- Rental income on overseas property
- Income from pensions held overseas
Whether you need to pay depends on your resident status in the United Kingdom. If you are not a UK tax resident you will not have to pay UK tax on your foreign income, only the income which arises in the United Kingdom.
You’re automatically 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 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
If you are classified as a UK tax resident, you will need to file a Self-Assessment Tax Return and report any foreign income there. The tax payable goes towards your self-assessment tax bill and needs to be paid by 31st January of the following year.
You may be able to claim tax relief if you are taxed in more than one country and that country has a Double Taxation Agreement in place with the United Kingdom.
When you move in or out of the UK, the tax year is usually split into 2 - a non-resident part and a resident part. This means you only pay UK tax on foreign income based on the time you were living here.
If you need any assistance with your foreign income or your resident status, please contact us.