UK Non Resident Tax Guide
Are you a non resident? If you’re a non resident and paying tax in the UK you could be paying too much.
Tax rules for non residents are complex and can change. With so many factors affecting your tax status it is vital that you understand which ones apply to you.
This guide tells you most of the aspects you need to know about UK tax and being a non resident.
Where to begin
A person’s liability to income tax in the UK is in the main dependent on their tax residence and domicile status. Other sources of income and assets can also have an effect on whether you are deemed a UK non resident.
What is my residence status?
If you are not a UK resident, special rules apply. In simple terms a non resident should only pay tax on income from a source in the UK.
HMRC have brought in a statutory residence test which can help you find out your non residence status.
New rules came into force in April 2013. These rules mean that some people who were previously classed as non resident for tax purposes are now considered as residents.
Working out your status can be complicated as it depends largely on your own personal circumstances.
If you are classed as a non resident for tax purposes, some income will remain taxable in the UK. Prime examples would be from UK government pensions and rental income. Non resident landlords can apply to the non resident landlord’s scheme and usually need to complete a UK tax return declaring their rental income each year.
Non residents and double taxation
Many countries have double taxation agreements. These ensure that the same income or gains aren’t taxed in more than one country, or, where applicable, tax is charged at a reduced rate. If you’re a resident of a country which the UK has a double taxation agreement with, you might be able to claim full or partial relief from UK tax on certain types of income from sources like a UK private or government pension.
Non resident tax returns
Generally you have to submit a Self Assessment tax return if you are a non resident tax payer. It’s worth knowing that HMRC’s free on-line system does not let you complete the necessary pages for being a non resident. Only commercial software can be used to submit a tax return (including non resident pages) online. Sometimes another type of HMRC form will be needed like an R43. Our experts can ensure the right form is used for each of the last four tax years and you can use our free taxation guides to learn more about what tax reliefs are available.
Do I need to tell HMRC about my non residency?
The answers is ‘yes’, with the tax office expecting you to declare your non resident status. The onus is on you to tell HMRC about your non residency with nothing happening automatically. Depending on your situation you will need to let HMRC know about your non residency status in different ways.
If you do not need to complete a Self Assessment tax return, a P85 leaving the UK form will be needed. When a Self Assessment tax return is required this includes all of the necessary information that HMRC will need to calculate your non residency tax position.
UK Non resident pension tax relief
Living outside the UK does not automatically stop you paying UK income tax on your pension income. In some cases tax relief can be available on one or both private or government pension income. Your eligibility relies on the legislation within the double taxation treaty between the UK and your country of residence. The legislation varies from country to country so you need to check the details of the UK double taxation treaty that applies to you.
Non resident tax services
Tax Rebate Services has been providing tax services to UK non residents since 2002. We can help by reviewing your own set of circumstances to find out what your tax status is in the UK. Our fixed fee or no rebate no fee services can then complete and submit the relevant forms for you, making sure your tax position is correct and that you only pay the tax you need to.
Call us today on +44 (0)1228 520477 to find out how we can help.
More useful guides for UK non residents:
- Expat tax return guide
- Automatic overseas test (AOT)
- Split year treatment
- Sufficient ties test
- Dual residence
- Seafarers tax deduction
- Double taxation treaties
- Statutory residence test
- Non domicile
- Remittance and arising
- Temporary non residence
- Having an overseas employer and your tax
- What is a DT Individual Form?
- UK secondment tax relief
- Tax Refunds for Offshore Workers
- Non resident pension tax relief
- Foreign Service tax relief
- Overseas Workday relief guide
- What is HS302?
- What is a HS304?
And please also see our Income Tax Form FAQs: