Reporting Foreign Income to HMRC UK 2026: What You Must Declare

If you live in the UK and receive income from abroad -- whether from a foreign employer, overseas property, foreign investments, or a bank account in another country -- you are generally required to declare it to HMRC and pay UK tax on it. The rules changed significantly from 6 April 2025 with the introduction of the Foreign Income and Gains (FIG) regime, replacing the old remittance basis. Here is what you need to know in 2026/27.

The Starting Point: UK Residence and Worldwide Income

UK tax residents are taxed on their worldwide income. This is the foundational rule. If you are tax resident in the UK -- broadly, if you spend more than 183 days here in a tax year, or meet certain other tests under the Statutory Residence Test -- then income arising anywhere in the world is potentially subject to UK income tax.

This applies regardless of where the money is paid, what currency it is in, or whether it is ever brought to the UK. The source of the income is irrelevant once residence is established.

What Types of Foreign Income Must Be Declared?

The following categories of foreign income are commonly reportable:

• Foreign employment income: If you work for an overseas employer or have earnings from employment duties performed abroad, that income is taxable in the UK if you are UK resident.
• Foreign rental income: Rental income from a property in another country is subject to UK income tax in the same way as a UK rental property. The income is added to your other income and taxed at your marginal rate.
• Foreign dividends: Dividends paid by overseas companies are taxable as dividend income. In 2026/27, the dividend allowance is GBP 500. Above that, dividends are taxed at 10.75% (basic rate), 35.75% (higher rate), or 39.35% (additional rate).
• Foreign savings interest: Interest from overseas bank accounts or bonds is taxable in the UK. The Personal Savings Allowance applies in the same way as for UK interest -- GBP 1,000 for basic-rate taxpayers, GBP 500 for higher-rate taxpayers.
• Foreign pensions: Most foreign pension income received by UK residents is taxable in the UK, though double-tax treaties often affect how this is applied.

The Foreign Income and Gains (FIG) Regime

From 6 April 2025, a new regime replaced the former remittance basis. The FIG regime allows individuals who have not been UK resident in the previous 10 years to receive a 100% relief on foreign income and gains arising in their first four years of UK tax residence. During those four years, eligible individuals can bring foreign income and gains to the UK without a UK tax charge.

This is a significant change from the old remittance basis, which required an annual charge for established non-domiciled residents and was more restrictive in scope. The FIG regime is broadly more straightforward: if you arrived in the UK from abroad and were not resident here in the prior decade, you may qualify for a complete exemption on foreign income and gains for your first four tax years.

After the four-year window, you are taxed on worldwide income in the same way as any other UK resident.

To claim the FIG relief, you must make an election on your Self Assessment tax return. You cannot simply omit foreign income without making the election.

Double Taxation Treaties

The UK has double-tax treaties (DTTs) with over 130 countries. These treaties generally prevent the same income being taxed twice -- once in the source country and once in the UK. The treatment depends on the specific treaty, but common outcomes include:

• A credit for foreign tax paid against UK tax due on the same income.
• An exemption from UK tax on certain categories of income (for example, some government pensions from treaty partners are only taxable in the source country).
• Reduced withholding tax rates on dividends, interest, and royalties.

Where a DTT applies, you declare the gross foreign income on your UK tax return and claim a credit for any tax already paid abroad. You pay the difference (if UK tax exceeds the foreign tax already paid). If foreign tax paid exceeds your UK liability on that income, you cannot normally reclaim the excess.

How to Report Foreign Income

Foreign income is reported through Self Assessment. If you have foreign income above de minimis levels (generally if the untaxed foreign income exceeds GBP 100, or foreign income of any amount if you are required to file for another reason), you must complete the foreign income pages of the SA100 tax return.

You will need records of all foreign income received, any foreign tax paid (supported by foreign tax certificates where possible), and the exchange rates used to convert amounts to sterling. HMRC accepts the average annual exchange rate published by HMRC, or the spot rate on the date of receipt.

The filing deadline is 31 January following the end of the tax year. For 2026/27 income, returns are due by 31 January 2028.

Penalties for Non-Disclosure

HMRC takes offshore non-disclosure seriously and has enhanced information-sharing arrangements with tax authorities in many countries under the Common Reporting Standard (CRS). Banks in most developed countries automatically report account information for UK residents to HMRC. The penalties for failing to declare foreign income are higher than for domestic errors and can include substantial surcharges.

If you have undisclosed foreign income from earlier years, HMRC's Worldwide Disclosure Facility allows voluntary disclosure at lower penalty rates than if HMRC discovers the income first.

Use the CalcHub Income Tax Calculator to estimate your UK tax liability once you have identified all sources of foreign income and applied any treaty credits or FIG relief.