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Rules for Tax on Foreign Income

Information in this section explains UK taxation on money earned abroad. Check whether you need to pay tax on foreign income and investments.

FOREIGN INCOME: The liabilities for UK Income Tax on revenue made overseas can also include things like:

  • Foreign investments and interest on savings.
  • Income made on overseas property rental.
  • Income realised from pensions held overseas.
  • Wages, salary, and bonuses (if you work abroad).

For taxation purposes, tax on foreign income refers to anything outside England, Scotland, Wales, and Northern Ireland. The Channel Islands and the Isle of Man also get classed as foreign.

Do You Need to Pay Tax on Foreign Income

As a rule, it is your ‘residence status’ that determines whether you need to pay taxes or not. You will need to work out whether you get classed as ‘resident’ in the United Kingdom.

What if you are not classed as United Kingdom resident? In this case, you will not be liable for paying UK tax on foreign income and investments.

But, as a rule getting classed as UK resident means you will pay tax on income earned abroad. There are some exceptions to this rule. They will apply if your ‘domicile’ (permanent home) is outside of the United Kingdom.

How to Report Foreign Income

In most cases, those who need to pay tax will report their foreign income using a Self Assessment tax return. But, some sources of foreign income gets taxed ‘differently’.

Income Taxed in more than one Country

There may be circumstances where you get taxed in the United Kingdom and in another country. In cases such as these, there are ways to claim tax relief if you get taxed twice.

Note: What if you have not yet paid any taxes on your foreign income? You will need to prove your eligibility to get the reliefs. Thus, you (or your agent) should apply for a ‘certificate of residence in the UK‘ for tax purposes.


Residence Status and Tax

Your status as a resident affects your liabilities for taxation. There may be an obligation to pay tax in the UK on income gained overseas.

Non-domiciled Resident

Are you are a resident in the UK but have your ‘domicile‘ (permanent home) based overseas? If so, you may not have to pay UK tax on your foreign income.

Paying Tax on Foreign Income

As a rule, a UK resident with foreign income or capital gains will need to fill in a Self Assessment tax return. But, some foreign income gets taxed differently.

Taxed Twice

You can get taxed on foreign income by HMRC in the UK and by the country where it comes from. Check how the double-taxation agreement affects the tax you pay in the UK and abroad.

Foreign Students

This section explains the taxation rules for foreign students who are studying in the UK. Check when you need to pay it and what happens if you start work in the United Kingdom.

Rules for Paying Tax on Foreign Income Gained Outside United Kingdom