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Moving to the UK? Get your tax position right.
This UK personal tax guide helps foreigners relocating to the UK and returning Brits manage and optimise their tax affairs. Learn how to navigate UK tax residency, FIG scheme, double taxation, and overseas income to stay compliant and tax-efficient.
Last updated 2025
If you are planning on moving to the UK or if you are already living in the UK, there will be much on your mind. One area that you should consider is your UK tax position.
As an expat, you may wish to reduce your exposure to UK taxation and at the same time, ensure that you remain compliant with your UK tax obligations.
Generally, it is best practice to organise your tax affairs in good time, to avoid any unnecessary complexities, in the present, future or if/when you decide to permanently settle in the UK. By seeking answers to the following three questions, this should enable you to understand and organise your UK tax affairs:
- What is my resident status?
- How will the UK tax my incomes and gains?
- Do I need to file UK tax returns?
Whether you’re a new arriver, exisiting non-dom or repatriating Brit, this guide will help you manage and optimise your UK tax position and to ensure you remain compliant with UK tax law.
This booklet has been written in general terms and we recommend that you obtain professional advice before acting or refraining from action on any of the contents of this publication. Global Tax Consulting accepts no liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication.
Your resident status is the first and most crucial step in determining the extent to which HMRC can tax your incomes and gains.
Your domestic resident status is determined by the Statutory Residence Test (‘SRT’). There are a series of tests to work through, split into three categories, as follows:
- The automatic overseas tests
- The automatic resident tests
- The sufficient ties tests
Once your personal circumstances and travel pattern satisfy one of the tests, this will conclude your resident status for the tax year in question.
The UK recognises the concept of a 'split year' which enables individuals who move to the UK within a tax year period to become resident upon arrival providing that they meet relevant criteria such as ceasing full time work overseas, commencing full time work in the UK or acquiring access to a permanent home in the UK.
If you are relocating to the UK within a tax year period, the plan will be to manage your travel pattern and personal circumstances so that you become tax resident from the date you arrive in the UK. Failure to do so, may result in you becoming tax resident at the beginning of the tax year which may create unexpected tax charges in relation to the period that you were not living in the UK.
It is strongly recommended that you keep a detailed record of your physical movements and personal circumstances to provide evidence to HMRC to back up your resident status should this be requested.
The UK offers a special tax regime which enables taxpayers that are considered new arrivers to exempt foreign incomes and gains from UK taxation.
The exemption is permitted for the first four tax years of residence in the UK.
You will be considered a new arriver if you were non-resident for ten consecutive years prior to the tax year of relocation.
Therefore, alongside your resident status in the current year, it is important to consider your historic resident status, to determine whether you can use the special tax regime ('the FIG scheme').
If you are a considered a new arriver, paying tax on your foreign incomes and gains is essentially voluntary for your first four years of residence.
You may switch between the arising basis and the FIG scheme year on year so if you choose to file on the FIG scheme in one tax year, you are not tied to choosing the FIG scheme in future tax years.
In many cases, it will not be clear at the start of the tax year whether the arising or the FIG scheme will be more beneficial to you. It is generally best practice to complete two calculations at the end of the tax year, to determine which option will generate a lower tax bill and thus which basis you should use.
If you are a historic non-dom remittance basis user, you may wish to use the temporary repatriation facility to remit foreign incomes and gains previously excluded from taxation to the UK for a flat tax charge - this is covered later in the guide.
Under the arising basis, you will pay tax on worldwide incomes and gains. You will be eligible for various tax allowances such as the personal allowance (for all incomes), the dividend allowance (for dividends), the personal savings allowance (for bank interest) and the annual exempt amount (for capital gains).
Felicity was born in the UK and lived in the UK her whole life until five years ago when she moved to the US for work.
Felicity has been non-resident since her move to the US but now plans to repatriate to the UK after her five year stint in the US.
Felicity will not be considered a new arriver as she was not non-resident for ten consecutive tax years prior to the tax year of relocation.
Felicity will not have access to the FIG scheme and therefore, be able to exclude her overseas incomes and gains from UK taxation.
Under the FIG scheme, you will pay tax on UK sourced incomes and UK property gains only. You will forgo entitlement to the personal allowance and annual exempt amount. You can remit overseas incomes and gains freely to the UK without incurring tax charges.
Mark has recently accepted a role in the UK and will relocate with his family.
Mark has never lived in the UK prior to relocation and has been non-resident in the UK his entire life.
Mark will be considered a new arriver as he was non-resident for ten consecutive tax years prior to the tax year of relocation.
Mark can therefore choose to file on the FIG scheme and exclude his overseas incomes and gains from UK taxation.
Under the arising basis, you will pay tax on all employment income, irrespective of whether work duties are physically performed in the UK or overseas.
Jessica is employed by a Dutch company and works remotely in the UK for 90% of the tax year. Jessica chooses to file on the arising basis and thus, she will pay UK tax on all her Dutch employment income.
Under the FIG scheme, you will pay tax on income generated from workdays exercised in the UK. You will not pay tax on income generated from workdays exercised overseas but this is capped at the lower of 30% of overseas workdays or £300,000.
Arak is employed by a UK company and his work pattern is split 80% in the UK and 20% overseas. Arak can exempt 20% of his income that relates to overseas workdays from UK taxation up to the £300,000 limit.
Under the arising basis, you will pay tax on global pension income. It may be possible to exempt the UK from taxing the pension income under international tax law – this is covered later in the guide.
Gabi is a long term resident in the UK and has pension incomes from the UK, Spain and the Bahamas. Gabi is long term resident and must use the arising basis and thus, will pay UK tax on all her pension incomes.
Under the FIG scheme, you will pay tax on UK pension income with the exception of the 25% tax free allowance and you will not pay tax on foreign pension income.
Bill recently moved to the UK and his only source of income is Canadian pension income. Bill can use the FIG scheme to exempt his pension income from UK taxation.
Under the arising basis, you will pay tax on global rental income no matter where the property is situated. Note that the UK does not allow a deduction for mortgage interest or depreciation.
Fiona is a long term resident and has a number of rental properties located in France. Fiona will be subject to UK taxation on the French rental profits.
Under the FIG scheme, you will pay tax on UK rental income and you will not pay tax on foreign rental income. Note that the UK does not allow a deduction for mortgage interest or depreciation.
Sami has recently relocated to the UK and has a number of rental properties located in the US. Sami can elect to use the FIG scheme to exempt the US rental income from UK taxation.
Under the arising basis, you will pay tax on global investment income, irrespective of where the investment is situated.
Lauren is long term resident and has a portfolio of international shares that pay an annual dividend. Lauren will be subject to tax on global dividend income.
Under the FIG scheme, you will pay tax UK investment income and you will not pay tax on foreign investment income.
Colin has recently relocated to the UK and has a portfolio of UK and US shares that pay an annual dividend. Colin can use the FIG scheme to exempt US dividends from UK taxation.
Under the arising basis, you will pay tax on global property gains. If the property has been your main residence and physically occupied, private residence relief will reduce the taxable gain.
Stefanos is a long term resident in the UK and sold his buy to let in Greece. Stefanos never lived in the property and therefore, the gain will be subject to UK taxation and private residence relief will not apply.
Under the FIG scheme, you will pay tax on UK property gains and you will not pay tax on foreign property gains. If the property has been your main residence and physically occupied, private residence relief will reduce the taxable gain.
Sarah recently relocated to the UK and sold her buy to let in Bulgaria after relocation. Sarah can use the FIG scheme to exempt the gain from UK taxation.
The Temporary Repatriation Facility (‘TRF’) is designed for individuals who have previously claimed the remittance basis and now wish to bring overseas incomes and gains into the UK.
The TRF allows you designate and pay tax on overseas incomes and gains previously excluded from UK taxation at a flat rate of 12% in the 2025/26 and 2026/27 tax years and 15% in the 2027/28 tax year.
The amount designated will be assumed to be net of foreign tax and thus, a foreign tax credit will not be available even if you paid tax overseas on the same income or gain.
you must have claimed the remittance basis via self assessment
You wish to bring funds you have exempted from taxation using the remittance basis to the UK
Use TRF to designate for a flat tax rate and remit funds freely to the UK
Adam is from Australia and has claimed the remittance basis for several years to exempt his Australian dividend income from UK taxation. In the 2025/26 tax year, he decides to use the Temporary Repatriation Facility (TRF) to designate £100,000 of the Australian dividend income.By designating the income under the TRF, the entire amount is taxed at the flat tax rate of 12% rate so the total tax bill is £12,000.
Double tax treaties are agreements between two countries which are designed to protect against the risk of double taxation where the same income is taxable in both countries.
Many tax systems around the world follow the principal of income arising in a country will be taxable in that country, irrespective of whether the individual is resident or not.
Double taxation could apply to an expat, if for example, they move to the UK and continue to receive incomes or gains overseas.
Double tax treaties provide relief by way of crediting tax suffered overseas, limiting the tax rate or completing removing the country’s right to tax the income.
As a starting point, the UK can tax the pension income as the income is considered UK sourced. However, the UK/France double taxation agreement removes the UK's right to tax the pension income. Therefore, under a tax treaty claim, Fred will not pay UK tax on his UK pension income.
The UK tax year runs from 6 April to 5 April. The tax return filing deadline is 31 October following the end of the tax year if you are filing paper or 31 January following the end of the tax year if you are filing electronically. The payment deadline is 31 January following the end of the tax year.
You can check whether you have an obligation to file a UK tax return on an annual basis here.
If you have not previously filed tax returns, you must register for self-assessment through submitting an SA1 form to HMRC here. HMRC will issue a 10 digit Unique Tax Reference number ('UTR') which you will use to file your tax returns.
If you are resident and in receipt of overseas incomes and gains, you must file a UK tax return. One point to note is if you use the FIG scheme, you will be required to disclose details of your overseas incomes and gains to HMRC, even though the overseas incomes and gains will not be taxable in the UK.
It is recommended that you keep good records of your incomes, gains and travel pattern to enable an accurate assessment of your UK tax position and to provide evidence to HMRC to back up the position should this be requested.
The Worldwide Disclosure Facility (WDF) provides an opportunity for taxpayers who have undisclosed overseas income, to come forward to HMRC to get their tax affairs up to date on the best possible terms.
As countries are increasingly sharing data with one and other, it is becoming more likely that HMRC will eventually discover any undisclosed overseas income. It is best to come forward on an unprompted basis than be caught by HMRC on a prompted basis, as making an unprompted disclosure will lead to lower penalties.
Penalties range from 0% to 200% and depend on a number of factors such as the source country, the year the income arose and the behaviour of the taxpayer.
HMRC have advised that you should take the following steps if you wish to make a disclosure:
- Notify HMRC that you wish to make a disclosure here or respond to their letter that you have undisclosed rental income;
- Tell HMRC about all incomes you’ve not told them about before through the disclosure portal;
- Make a formal offer to HMRC to settle the outstanding tax, penalties and interest;
- Settle the outstanding bill upon submission of the disclosure;
- Help HMRC process the disclosure such as providing records and data to back up the formal offer.
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