UK expat tax advice: everything you need to know

Being an expatriate (‘expat’) can bring some tax advantages, but it does mean taking extra care and still paying the UK tax you owe.

The amount of UK income tax you have to pay will depend on many different factors, including:

• How much time you continue to spend in the UK
• Whether you continue to work in the UK
• How much of your income originates in the UK
• Whether or not your new country has a double-taxation agreement with the UK

Living abroad can also affect how much capital gains tax you may need to pay on certain assets.

You can continue paying national insurance (NI) contributions if you plan to return to the UK at any point, e.g. to claim the state pension.

Here’s how to work out the UK tax you may need to pay in various circumstances.

What if I’m working abroad some of the time?

If you are a non-resident, you will be exempt from most UK tax. To be a non-resident, you must have worked outside the UK for one full tax year or more.

You must also spend no more than 91 days a year in a row in the UK, or over 182 days in any tax year.

This means you’ll need to carefully track how much time you spend in the UK.

To be a non-resident, you must also ensure you don’t work in the UK for more than 30 days per year.

What if I’m working abroad permanently?

So long as you fulfil all the above conditions, you’ll be classed as a non-resident.

However, if you still receive some income in the UK, such as from rental property, you may still be taxed on it in the UK.

What if I’m retiring abroad?

If you are retiring abroad but still have UK-based pensions, you must decide how to take income from those pensions.

Some people transfer their pension into a qualifying recognised overseas pension scheme (QROPS) to have it paid in their country of residence, which can be simpler and may mean a lower tax bill.

However, transferring to a QROPS may bring a tax charge of up to 25%, so it's vital to seek advice from a financial adviser specialising in expatriate finances.

Can I be taxed on the same income twice?

Sometimes, you may be asked to pay tax both in the UK and in your new country of residence.

However, if you are living in a country that has a double-taxation agreement with the UK, you can usually claim back some or all of the ‘extra’ tax (depending on the particular agreement).

A financial adviser can tell you more about this.

What if I need financial advice while I’m overseas?

Finding trustworthy financial advice as an expat can be a common problem, especially if you live in an unregulated jurisdiction.

Some UK-based advisers offer specialist international services to expats, but you need to specify what you need when you search via Unbiased.

Get expert financial advice

Being classed as a UK expat can provide some notable tax advantages, as long as you carefully track your time in the UK and pay any outstanding taxes on time and in full.

The amount of tax you owe in the UK as an expat can vary according to factors like your time spent locally, any work you perform and income you earn in the UK, and double-taxation agreements between the UK and your country of residence.

Unbiased will match you with an experienced financial adviser who can identify your UK expat tax obligations and make it simple to maintain compliance and accurate financial records as an expat.