We work with many clients who live or work abroad but still have tax obligations in the UK. The rules can be complex, and it’s easy to miss key details, especially when your home, work and family life span more than one country.
Our Expatriate Taxation Service helps clients navigate these rules, stay compliant, and plan effectively for their future.
Here's an overview of what UK expats need to know.
Whether you are required to pay UK tax largely depends on your residency status. The UK uses the Statutory Residence Test (SRT) to determine this.
You will usually be classed as a UK resident if:
Other factors, such as family, work, and accommodation ties, can also affect your status. The SRT can be detailed, but getting it right is crucial, as it determines which income and gains are subject to UK tax.
If you are a UK resident, you will generally pay tax on your worldwide income and gains. That includes overseas employment income, rental income, or foreign investments.
If you are a non-resident, you typically only pay UK tax on UK-sourced income, such as rent from a UK property or certain types of UK investments.
Understanding where you fall on this scale can make a significant difference to your overall tax position and help you avoid double taxation.
UK residents are generally entitled to the personal tax allowance, which means you can earn a certain amount before paying income tax.
Even if you live abroad, if you are classed as a UK resident, the same allowances and tax bands apply. Each year, we keep our clients informed of any updates to the personal allowance, dividend allowance, and savings thresholds, helping them plan accordingly.
Capital Gains Tax (CGT) applies when you sell or dispose of assets, such as a property, for more than you paid for it.
For UK property:
CGT rates for residential property currently stand at 18% (for basic-rate taxpayers) or 24% (for higher-rate and additional-rate taxpayers). Reporting deadlines are tight, so staying organised is key.
Your tax position can shift quickly when your lifestyle changes. Common triggers include:
It's essential to notify HMRC about significant changes or to request that we handle them on your behalf to avoid unexpected tax liabilities or compliance issues.
If you would like tailored advice on your UK tax position as an expatriate, we are here to help. You can call us on 01623 490 120 or email This email address is being protected from spambots. You need JavaScript enabled to view it.
Haidee is our Personal Tax Director and is a fully qualified tax adviser, having achieved the ATT qualification in 2006. Tax efficiency being her main concern. Specialising in taxation, Haidee provides clients with advice on personal tax, PAYE services, VAT and social security. She also provides guidance to new start-up businesses.
Call us today on01623 490120
or email info@watsonk.co.uk
When you first start a business, your focus is usually on attracting customers, generating sales and building a successful company. Few business owners spend much time thinking about how or when they will eventually leave the business.
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