The UK Rules
'Follow the Regulations'
Domicile

Non Domiciled Resident Tax Rules

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.

NON-DOMICILED RESIDENT: The same rule applies to any capital gains made selling shares or a second home.

How to Work Out Domicile

As a rule, there is a basic method for working out your domicile. In most cases, it would be the country that your father considered to be his permanent home at the time you were born.

Note: Your 'domicile' might have changed since then. It could happen if you moved overseas and did not intend to return to the United Kingdom.

What if you are still unsure which country is your domiciled residence. You can get professional advice on tax from a monetary adviser. You may also need legal advice about the special rules for domicile and Inheritance Tax.

Non-domiciled Taxation

You will not need to pay UK tax on foreign income or gains made abroad if both of these apply to you:

Foreign Income over £2,000

The rules change in circumstances where the earnings are more than £2,000. In this case, the law requires you to report the foreign income (or gains). The same law means you must report money that you 'personally' bring into the United Kingdom.

Use a Self Assessment tax return for this type of situation. You then choose between paying any charge which is due, or claiming the remittance basis. In some cases you can claim it back if you get taxed twice.

Remittance Basis

By claiming the remittance basis you only pay UK tax on income or gains brought into the United Kingdom. But, it means:

The annual charge you pay would be either:

Note: Claiming the remittance basis is a complex process. You can contact HM Revenue and Customs or employ professional tax help (e.g. a tax adviser).

Working in the United Kingdom and Abroad

If you work abroad and in the United Kingdom there will be special rules that apply to you. You may qualify for the 'foreign workers' exemption.

It means you do not have to make tax payments on your foreign earnings or gains. This includes those which you bring into this country. You will qualify for exemption and do not need to do anything, providing:

Seconded to the United Kingdom

What if your employer sends you to work in the United Kingdom on secondment? You may be able to claim through a process called 'Overseas Workday Relief'.

Those who qualify for secondment will pay tax on income based on the number of days worked here. You do not pay for the time that you work abroad (if you do not bring it into this country). Your employer should have more information on getting seconded to the United Kingdom.

Also in this section...

Tax on Foreign Income: Information explaining the rules of UK taxation on money earned abroad.
Residence Status and Tax: How your status as a resident affects your liabilities for UK taxation.
Paying Tax on Foreign Income: Payment rules for a UK resident with foreign income or capital gains.
Taxed Twice: How the double-taxation agreement affects the tax you pay in the UK and abroad.
Foreign Students: The rules for paying tax on foreign income while studying in the United Kingdom.

Domicile and Non-domiciled Resident Rules in the United Kingdom