Top Special Tax Regimes for Foreign Residents – UK Guide

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If you are a UK taxpayer thinking about living or working abroad, tax is never far from your mind. You do not want to pay tax twice. You also do not want a surprise letter from HMRC a few years later.

Many countries now offer special rules for foreign residents. Some do not tax foreign income at all. Others give a low flat rate or a time-limited exemption. At the same time, the UK has brought in the new Foreign Income and Gains (FIG) regime and still uses the Statutory Residence Test to decide who is a UK resident for tax.

This guide explains eight tax-friendly regimes abroad and how they sit beside UK rules. It is written for UK expats, non-doms, and mobile professionals who want clear, practical detail rather than vague promises.

You will also find links to helpful UK resources such as HMRC guidance on tax on foreign income and Self Assessment help sheets.

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What is a special tax regime for foreign residents?

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A special tax regime is a set of rules that gives better treatment to new or foreign residents than to long-term locals.

Typical features include:

• No tax on foreign-source income
• No or low tax on foreign capital gains
• Time-limited “holiday” on overseas income
• Flat tax rate for certain skilled workers or retirees
• Territorial systems that tax only local income

For UK people, this can look very attractive. But UK rules still matter. If you remain a UK tax resident, you are usually taxed on your worldwide income unless you qualify for Foreign Income and Gains relief or other reliefs.

That is why it is vital to:

• Check your UK residence under the Statutory Residence Test
• Understand whether you are still UK-domiciled
• Look at the double tax treaties between the UK and your new country

For reference, HMRC guidance in the RDR3 notes explains how the Statutory Residence Test works in detail.

For the new FIG regime, HMRC now has a dedicated Residence and FIG Regime Manual which sets out how relief for foreign income and gains operates.

For tailored help with this, you can speak with the team at Global Tax Consulting.

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Quick comparison of eight tax friendly regimes

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This table gives a simple view of the eight regimes we cover in this guide.

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This table gives a simple view of the eight regimes we cover in this guide.Use a simple bar

chart that shows the UK top marginal income tax rate next to 0% for the UAE. This helps readers see the contrast at a glance.

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How does UK tax on foreign income work in general?

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Before looking at other countries, it helps to see how the UK itself treats foreign income.

If you are UK resident for tax, you will normally pay UK tax on your foreign income and gains, subject to reliefs.

Key points:

• Non-residents usually do not pay UK tax on foreign income
• UK residents pay tax on most foreign income, such as overseas rents and interest
• You may be able to claim relief for foreign tax already paid using Foreign Tax Credit Relief
• Helpsheets such as HS264 (remittance basis) and foreign income notes support Self Assessment completion.

You can read more in HMRC’s guidance on tax on foreign income and the Statutory Residence Test notes.

If you live abroad and still have a UK income, the article on HMRC rules for UK income while abroad gives a clear overview from a UK expat angle.

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1. United Arab Emirates – zero tax on personal income

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Is the UAE really tax-free for UK expats?

For most individuals, the UAE does not tax salaries and wages. There is also no personal tax on investment income or capital gains.

This can be very attractive if you are moving from a high-tax country like the UK. There is VAT, and there is now corporate tax in some cases, but your personal earned income is often outside local tax.

The UK has a double taxation agreement with the UAE. This is designed to stop the same income being taxed twice.

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Typical UK scenario

• You move to Dubai on a long-term contract
• You become a tax resident in the UAE and a non-resident in the UK under the Statutory Residence Test
• Your UAE salary is not taxed in the UAE, and, because you are non-resident, it is normally not taxed in the UK either
  
  

If you still have UK rents or other UK income, UK tax can still apply. The GTC guide on tax on UK pension income while living abroad is useful if you intend to draw pensions while overseas.

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2. Australia temporary resident relief

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Australia has a special regime for many temporary residents, such as skilled workers on certain visas. In many cases, you pay tax only on Australian-source income. Foreign income is usually outside Australian tax while you keep a temporary status.

This can help UK professionals on medium-term assignments. You might pay Australian tax on your local salary but not on investment income from outside Australia.

If you are leaving the UK for Australia, the page on UK tax moving to Australia explains how UK rules mesh with local treatment.

UK planning tip

If you keep a UK property, you will likely still file a UK tax return as a non-resident landlord. The article on the tax guide for non-resident landlords is a good starting point.

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3. New Zealand four-year transitional exemption

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New Zealand offers new tax residents a four-year exemption on most foreign-source income. During that time, you can receive overseas investment income, foreign pensions, and other income from abroad without New Zealand tax in many cases.

After four years, you are taxed on worldwide income under normal rules. There is still no broad capital gains tax, though specific rules may apply.

The country page in the Global Tax Index for New Zealand gives a structured summary of rates, bands, and local rules.

For UK people, this regime can suit:

• Retirees drawing foreign pensions
• Investors with large portfolios
• People with foreign businesses who want time to restructure

You must still think about UK residence. The guide on leaving the UK tax guide explains the main UK steps when you move out.

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4. United Kingdom Foreign Income and Gains regime

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The UK itself now has a regime that can help new arrivals.

From April 2025, people who have not been UK residents for the previous ten tax years may qualify for Foreign Income and Gains relief. Broadly, foreign income and gains can be exempt from UK tax for up to four years, even if brought to the UK.

This is a major shift from the old non-dom rules based on the remittance basis. Under the new system:

• You must be a new UK resident who has been non-resident for at least ten tax years
• Relief can last for four tax years
• During that time, qualifying foreign income and gains are not taxed in the UK

After the four years end, your worldwide income is taxed in the usual way.

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5. Panama territorial system and Friendly Nations visa

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Panama operates a territorial tax system. In simple terms, tax falls only on income with a Panamanian source. Foreign-source income is not taxed, whether or not you live there.

Many expats use Panama as a base because:

• Foreign investments and foreign business income are often outside the Panamanian tax system
• The Friendly Nations visa can offer a clear path to residency for many nationalities
• Living costs can be lower than in many Western cities

The Panama entry in the Global Tax Index gives more detail on local rules, rates, and visa links.

As always, UK residence is the key test. If you are still a UK resident, foreign income remains within the UK scope even if Panama does not tax it. The GTC article on how to avoid paying tax twice sets out how double tax treaties and reliefs work in practice.

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6. Argentina offers five years of relief for new residents

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Argentina has offered new tax residents a five-year exemption for foreign-source income in many cases. It can also treat some foreign pensions and overseas passive income favourably for non-domiciled residents.

This may suit:

• UK nationals relocating for work or lifestyle reasons
• Those with significant overseas investment income
• People who want a medium-term base in Latin America

You can review headline rules and rates in the Argentina tax index page.

Because Argentina has had periods of higher inflation and currency controls, tax is only one part of the decision. You should also look at practical issues such as exchange limits and local reporting. Professional advice is highly recommended before moving significant assets.

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7. Singapore territorial rules and investor focus

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Singapore taxes income that has a Singapore source. Foreign-source income is usually taxed only when it is received in Singapore and certain conditions are met. In practice, many types of foreign dividends and branch profits can be exempt when brought in if they meet specific tests.

There is no general tax on capital gains and no net wealth tax. Personal income tax rates are progressive and top out at a level that is lower than the UK top rate.

You can find an overview of the local system in the Singapore tax index entry.

This kind of regime often suits:

• Entrepreneurs holding companies in other countries
• Investors who wish to keep funds outside Singapore
• Professionals with regional or global roles

From a UK perspective, you must still plan your exit carefully. The GTC article Can I live abroad and work for a UK company explains how UK tax, PAYE, and social security can apply when the employer is still based in Britain.

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8. Thailand LTR visa and territorial elements

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Thailand has introduced the Long-Term Resident (LTR) visa. It is aimed at wealthy global citizens, retirees, and highly skilled professionals.

Key points include:

• A flat 17% personal income tax rate for certain high-skilled roles
• Various visa classes for retirees and remote workers
• Territorial features that can keep foreign-source income outside Thai tax when managed correctly

For UK nationals who want to base themselves in Southeast Asia, this can be an appealing mix of lifestyle and tax treatment.

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How to line up foreign regimes with UK rules

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Step 1: Check your UK residence position

Use the Statutory Residence Test to see whether you are UK resident in a given tax year. HMRC’s RDR3 notes walk through the automatic UK tests, automatic overseas tests and the sufficient ties test.

Global Tax Consulting’s UK tax residency assessment gives tailored support and can help you plan travel days and ties.

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Step 2 – List all your income and where it comes from

Make a simple table for:

• UK salary and bonuses
• UK rents and gains on UK property
• Overseas salary and consulting income
• Foreign rents, dividends, and interest
• Pensions and lump sums

This makes it easier to apply separate rules for UK-source and foreign-source income.

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Step 3 – Map your chosen country’s regime

For each option (UAE, Australia, New Zealand, and so on), check:

• Who qualifies
• How long relief last
• Which income is covered
• Whether remittances change the position
• Whether there is a double tax treaty with the UK

The Global Tax Index gathers this in one place for 150-plus countries.

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Step 5 – Plan before you move

Good planning is normally done before the move date, not after. In practice, this can include:

• Timing asset sales to fall in the best tax year
• Restructuring investments or companies
• Checking whether split-year treatment might apply when leaving or arriving in the UK.
• Notifying HMRC and completing tax forms correctly

The GTC article on split-year treatment explains how this relief works when you change residence in the middle of a tax year.

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FAQs

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Do I still pay UK tax if I live in a country with no income tax?

You may do. If you remain UK tax resident you are usually taxed on worldwide income. You need to pass an automatic overseas test or reduce UK ties enough to become non-resident under the Statutory Residence Test before most foreign income falls outside UK scope.

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Can the UK FIG regime and a foreign special regime work together?

Yes, in some cases. For example, you might live in a territorial tax country and then move to the UK after ten non-resident years and claim Foreign Income and Gains relief for four years. But you need careful timing and up-to-date advice, as HMRC rules and rates can change.

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How do I stop being a UK resident for tax?

There is no single form that makes you a non-resident. You must meet the tests in the Statutory Residence Test. This usually means limiting UK days and breaking or reducing UK ties, such as work and home. HMRC’s RDR3 guidance and the GTC page on UK tax residency assessment are the best places to start.

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Will a double tax treaty always stop me from paying tax twice?

Double tax treaties are designed to stop the same income being taxed twice, but they do not always remove tax entirely. Often, they decide which country has the main right to tax and then allow credit for tax paid in the other. The GTC article on how to avoid paying tax twice explains this in plain English.

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Do I need to file a UK tax return if I now live overseas?

You might. Common reasons include UK rental income, UK self-employment, significant capital gains, and certain foreign income where UK tax may still apply. HMRC guidance and the GTC article Do I need to file a UK tax return if I live overseas both outline the main triggers