UK Expat Tax—Everything You Need To Know

This guide breaks down the essential UK expat tax rules – covering which taxes apply, what reliefs are available, how residency is determined, and how to stay compliant and tax-efficient wherever you’re based.

Who Is Considered a UK Tax Resident?

As of April 2025, your UK tax obligations are determined primarily by your residency status – not your domicile. The Statutory Residence Test (SRT) is the legal framework used to establish whether you are considered a UK tax resident for a given tax year (6 April to 5 April).

The test uses a combination of days spent in the UK, ties to the UK, and work patterns to assess your tax residency. You are typically considered non-resident if:

• You spend fewer than 16 days in the UK during the tax year.
• You spent fewer than 46 days, and you weren’t a UK resident in any of the previous three tax years.
• You spend fewer than 91 days in the UK and work full-time overseas (at least 35 hours/week), with no more than 30 working days in the UK.

If none of these apply, you may still be considered a UK resident based on the number of ties you have (such as a home, family, or substantive work in the UK).

Your residency status affects whether you pay UK tax on:

• UK and worldwide income.
• Capital gains on global assets.
• Inheritance tax (currently still based on domicile, but under consultation for reform).

The SRT is a complex assessment. A specialist tax adviser for expats, like Titan Wealth International, can help you determine your residency status accurately and structure your affairs tax-efficiently.

Taxes You Need To Pay as an Expat

Once you determine your residency status, the table below can help you find out which tax responsibilities apply to you.

Income Tax Rules for Expats

Your UK income tax liability as an expat depends on your UK residency status. As of 6 April 2025, the UK applies a residence-based tax system. If you are UK tax resident, you are generally taxed on your worldwide income, with limited exemptions for new arrivals.

Capital Gains Tax Rules for Expats

Capital Gains Tax (CGT) in the UK depends on your residency status and the location and nature of the asset. UK tax residents are generally taxed on their worldwide gains, while non-residents are typically only taxed on gains from UK property or assets used in UK trade.

CGT Rebasing (2025 Transitional Relief)

New UK residents (non-resident for 10 consecutive years prior to becoming UK-resident) can rebase foreign assets to their value as of 5 April 2019. This reduces future CGT liability when those assets are sold.

Expats who became UK residents under the post-2025 regime should review their CGT exposure carefully – especially if returning to the UK after a long absence.

Planning ahead can help mitigate unnecessary tax. For tailored advice on asset structuring, transitional relief, and international tax planning, speak to a cross-border specialist at Titan Wealth International.

Inheritance Tax Rules for Expats

Inheritance Tax (IHT) in the UK is still determined by your domicile, not your residency status, although this is under review. The table below outlines the current treatment for UK tax residents and non-residents:

Inheritance Tax remains a domicile-based system for now—but the UK government is actively consulting on reforms that could shift this to a residency-based approach. If you’re a British expat with cross-border assets or planning to return to the UK, it’s vital to stay ahead of these changes.

Speak with a specialist at Titan Wealth International to review your domicile position, protect your estate, and ensure your wealth transfers efficiently under the current and future IHT regimes.

Stamp Duty Land Tax Rules for Expats

Purchasing properties in the UK can make you subject to Stamp Duty Land Tax, but the rules differ depending on your residency status.

Thinking of buying UK property as an expat? The 2% non-resident SDLT surcharge and additional property rules can impact your investment returns. Titan Wealth International can help you structure your purchase tax-efficiently and advise on timing, ownership structure, and reliefs.

UK Non-Dom Tax Rules

As of 6 April 2025, the UK no longer operates a domicile-based tax system for Income Tax and Capital Gains Tax. The remittance basis, which previously allowed UK-resident non-doms to pay UK tax only on foreign income and gains brought into the UK has been abolished.

Under the new residence-based regime, your UK tax liability is determined solely by your tax residency status, not your domicile status.

You may still be considered non-domiciled for Inheritance Tax purposes, but your domicile status no longer affects how your income and capital gains are taxed if you are a UK resident.

What’s Changed for Non-Doms:

• All UK tax residents are now taxed on their worldwide income and gains, regardless of domicile.
• New UK residents (non-resident for 10 consecutive tax years) can claim a 4-year exemption on foreign income and gains (FIG) – even if the funds are brought into the UK.
• Trust protections have been removed if the settlor or beneficiary is a UK resident, trust income and gains are now taxable in full.

These changes may affect long-term residents, returning expats, and those with offshore trusts or investments. It’s crucial to revisit your strategy with a qualified cross-border tax adviser.

What if You Are Planning To Return to the UK?

If you’re an expat planning to return to the UK or a previously non-domiciled individual, the 2025 tax reforms have significant implications for your income, assets, and future liabilities.

Key Considerations on Repatriation:

• Split-year treatment: If you return partway through the tax year, you may qualify for split-year treatment, allowing your tax year to be divided into a non-resident and resident portion. This ensures UK tax only applies from the date your UK residency resumes.
• Worldwide taxation: From 6 April 2025, all UK tax residents are taxed on their global income and gains, regardless of domicile. The previous remittance basis has been abolished.
• FIG exemption: If you’ve been non-UK resident for the last 10 consecutive tax years, you may qualify for the 4-year Foreign Income and Gains (FIG) exemption. This allows you to:
  • Avoid UK tax on most foreign income and capital gains.
  • Bring those funds into the UK tax-free during the exemption period.
• Trust structures: Any trust protections available under the former non-dom regime no longer apply. If you’re a settler or beneficiary of an offshore trust, and you’re a UK resident, trust income and gains may now be fully taxable.

Titan Wealth International’s repatriation service can help you structure your return tax-efficiently ensuring you make full use of available reliefs, avoid unnecessary exposure, and plan your re-entry to the UK with confidence.

UK Expat Tax Reliefs

Under the new residence-based tax system, there are still important reliefs available to UK expats and non-residents. These can help reduce or eliminate double taxation and improve tax efficiency.

As a UK expat, you can avoid overpaying taxes by claiming the following tax reliefs:

1. Double Taxation Agreement.
2. Foreign Tax Credit.
3. Tax-Free Personal Allowance.

Double Taxation Agreement

The UK has tax treaties with over 130 countries, including the US, Australia, South Africa, and EU nations. These agreements are designed to prevent double taxation of the same income.

Depending on the agreement, you may claim partial or full relief before being taxed or a refund after being taxed. Each agreement includes:

• Exempt income from tax in one country
• Claim relief at source (where foreign tax is reduced upfront) or apply for a refund of overpaid tax.
• Use a UK Foreign Tax Credit (FTC) to offset foreign tax already paid against your UK liability.

Each agreement differs in scope and complexity, and not all income types are treated the same. It’s essential to review the DTA specific to your country of residence or speak with an expat tax adviser to ensure full compliance.

Foreign Tax Credit

If no Double Taxation Agreement applies, you may still claim a Foreign Tax Credit on your UK tax return. This allows you to offset tax paid abroad against your UK liability up to the amount of UK tax due on that income.

To claim an FTC, you must report your foreign income and the tax paid when filing your Self Assessment return.

Tax-Free Personal Allowance

Most UK residents including eligible expats receive a personal allowance of £12,570, meaning the first £12,570 of income is tax-free.

You may also qualify for the personal allowance as a non-resident if:

• You’re a UK national.
• You’re a citizen of an EEA country.
• You worked for the UK government overseas.
• Your country has a DTA with the UK that grants the allowance.

The personal allowance tapers off for high earners and is reduced by £1 for every £2 earned above £100,000 and eliminated entirely at £125,140.

Not sure what reliefs you qualify for? Titan Wealth International can help you review your residency, tax treaty position, and filing obligations so you pay no more tax than necessary.

How Is Expat Income Tax Calculated?

The UK tax year runs from 6 April to 5 April of the following year. Your income tax liability as an expat depends on your UK residency status and the source of your income.

If you’re a UK tax resident, you’re generally taxed on your worldwide income, unless you qualify for the 4-year FIG exemption as a new resident.

If you’re non-resident, you’re typically only taxed on UK-sourced income, such as UK employment or rental income.

If you qualify for a personal allowance, you’ll have to pay tax on any income that exceeds that amount. Otherwise, all your income in the UK will be taxed.

Once your taxable income exceeds the personal allowance, the following bands apply:

1. 20% (basic rate): from £12,571 to £50,270
2. 40% (higher rate): from £50,271 to £125,140
3. 45% (additional rate): over £125,140

These bands apply to most types of income, including employment, pensions, and foreign income (if you’re a UK resident).

How To File an Expat Tax Return From Abroad

If you’re a British national or former UK resident living overseas, your expat tax filing responsibilities may still include submitting a Self Assessment tax return ( SA100) – especially if you have UK-sourced income, are a UK tax resident, or need to claim reliefs or exemptions.

When Do You Need to File an Expat Tax Return?

You may be required to complete an expat tax return if any of the following apply:

• You’re a UK tax resident, and your total income (UK and foreign) exceeds the personal allowance.
• You’re non-resident, but receive income from:
  • UK rental property.
  • UK pensions.
  • UK dividends or interest.
• You’re claiming split-year treatment or need to declare foreign tax credits or reliefs under a Double Taxation Agreement.

Deadlines for Expat Tax Filing

If you’re a UK resident, the deadlines are:

1. January 31 at midnight for taxes owed for the previous year if using an online form.
2. October 31 at midnight for taxes owed for the previous year if using a paper form.

Residency Considerations: SA109 Form

If you’re a non-resident or claiming split-year treatment, you must also submit the SA109 residency pages by October 31. These cannot be filed via HMRC’s standard online service and must be:

• Sent by paper,
• Or submitted using recognised third-party software.

What Happens With Late Expat Tax Returns?

If you miss the deadline for your expat tax return, HMRC will apply penalties regardless of whether you owe tax or not. Interest also accrues daily on any unpaid tax from the due date (31 January) until it is settled.

Late Filing Penalties

• Up to 3 months late: Flat penalty of £100.
• Over 3 months late: Daily penalties of £10 per day, up to 90 days (£900 max).
• Over 6 months late: Additional penalty of £300 or 5% of the tax due (whichever is greater).
• Over 12 months late: Further £300 or 5% charge—plus higher penalties if HMRC deems the delay deliberate.

Even if you’re an expat with no tax due, you can still incur penalties simply for filing late so it’s vital to meet the deadlines or seek an extension if needed.

Need help filing from overseas? Titan Wealth International provides trusted expat tax filing support, minimising risk and ensuring full compliance, wherever you are.

How To Reduce Liabilities When Filing UK Taxes From Abroad

While expats may not always be required to file a UK tax return, this depends on your residency status, the type and amount of income, and whether it’s already been taxed at source.

Expats living abroad don’t need to file a tax return in the UK if:

1. You’re non-resident for UK tax purposes,
2. Your only UK income is taxed at source (e.g. under PAYE or NRLS),
3. Your total income, including UK and foreign dividends, is below £500 and you have no other taxable income to report.

Tax Planning Strategies for Expats

Even if you’re required to file a UK tax return, there are several tax planning strategies to reduce your UK tax exposure while living abroad:

Use Joint Ownership for UK Assets

Holding UK property or investments jointly with a spouse may help reduce exposure to higher rates of Income Tax or Capital Gains Tax, especially where one partner pays tax at a lower rate.

Structure Offshore Savings Efficiently

If you’re a UK tax resident, offshore savings interest is still taxable. However, using tax-neutral jurisdictions combined with full disclosure can offer long-term structuring benefits when properly managed.

Register for the Non-Resident Landlord Scheme (NRLS)

NRLS enables eligible expats to receive gross rental income from UK property, giving you full control over expense deductions and tax reporting through Self Assessment.

Explore International Pension Transfers

If you’re permanently based overseas, a transfer to a Qualifying Recognised Overseas Pension Scheme (QROPS) or an International SIPP could improve tax efficiency, provide multi-currency options, and offer wider investment choice. Transfers are subject to eligibility and local tax rules.

• These cross-border tax planning strategies must be tailored to your individual circumstances and country of residence. Always seek specialist advice to ensure compliance and avoid unintended tax exposure.

Why Receiving Expat Tax Advice in the UK Is Important

Expat taxation is complex especially if you’re managing income, property, or pensions across multiple jurisdictions.

Whether you’re living overseas, returning to the UK, or investing internationally, working with an experienced expat tax adviser ensures your financial strategy is compliant, efficient, and future-ready.

Partnering with a trusted expat tax specialist can help you:

Whether you’re living abroad, returning to the UK, or planning across borders, the team at Titan Wealth International provides trusted, personalised UK expat tax advice. We’ll help you navigate complex rules, avoid costly mistakes, and optimise your global financial position with confidence.