Do I pay UK tax on foreign income?

Full answer

UK tax on foreign income 2025/26. UK resident: pay UK Income Tax on worldwide income. Test residency using the Statutory Residence Test (days in UK + ties test). Non-resident: pay UK tax only on UK-source income (UK employment days, UK rental, UK pensions, certain investment income). Domicile reform (effective 6 April 2025): the "remittance basis" for non-UK-domiciled residents was abolished. Replaced by the Foreign Income and Gains (FIG) regime: new arrivals to the UK (after 10+ years of non-residence) get 4 years of UK tax exemption on foreign income and gains, regardless of remittance. After year 4, full UK tax on worldwide income, like any other UK resident. Double tax relief: usually a tax credit for tax already paid in the foreign country, limited to the UK tax that would have been due — via double tax treaty. Foreign rental income: declarable on SA Foreign pages (SA106), with mortgage interest relief (Section 24 rules still apply). Foreign pensions: usually taxed as UK pension income after personal allowance. Foreign dividends: PSA and £500 dividend allowance apply; further taxed at 8.75%/33.75%/39.35%. Common pitfalls: failing to declare overseas property, crypto on foreign exchanges, US-based brokerage accounts. CRS (Common Reporting Standard) means HMRC receives data on UK residents' accounts in 100+ countries. Always declare — penalties for offshore non-disclosure are severe.

More answers

• Do I need to file a UK Self Assessment tax return?
• How can I legally reduce my UK tax bill?