Tax on foreign income
2. UK residence and tax
Your UK residence status affects whether you need to pay tax in the UK on your foreign income.
Non-residents only pay tax on their UK income - they don’t pay UK tax on their foreign income.
Residents normally pay UK tax on all their income, whether it’s from the UK or abroad. But there are special rules for UK residents whose permanent home (‘domicile’) is abroad.
Work out your residence status
Whether you’re UK resident usually depends on how many days you spend in the UK in the tax year (6 April to 5 April the following year).
You’re automatically resident if either:
- you spent 183 or more days in the UK in the tax year
- your only home was in the UK - you must have owned, rented or lived in it for at least 91 days in total - and you spent at least 30 days there in the tax year
You’re automatically non-resident if either:
- you spent fewer than 16 days in the UK (or 46 days if you haven’t been classed as UK resident for the 3 previous tax years)
- you work abroad full-time (averaging at least 35 hours a week) and spent fewer than 91 days in the UK, of which no more than 30 were spent working
If your situation’s more complicated or you need to confirm your status, you can:
- use HM Revenue and Customs’ (HMRC) Tax Residence Indicator (use the link under ‘Information you might need’)
- read HMRC’s guidance on the Statutory Residence Test
- get professional tax help
Your residence status when you move
When you move in or out of the UK, the tax year is usually split into 2 - a non-resident part and a resident part. This means you only pay UK tax on foreign income based on the time you were living here. This is called ‘split-year treatment’.
You don’t need to claim split-year treatment - it’s applied automatically.
You won’t get it if you live abroad for less than a full tax year before returning to the UK. You also need to meet other conditions - to find out if you qualify, you can:
- use HMRC’s Tax Residence Indicator (use the link under ‘I already know my residence status’)
- read chapter 5 of HMRC’s guidance note on the Statutory Residence Test
- contact HMRC
If your situation changes
Your status can change from one tax year to the next. Check your status if your situation changes, for example:
- you spend more or less time in the UK
- you buy or sell a home in the UK
- you change your job
- your family moves in or out of the UK, or you get married, separate or have children
Residence and capital gains
You work out your residence status for capital gains (for example, when you sell shares or a second home) the same way as you do for income.
UK residents have to pay tax on their UK and foreign gains. Non-residents have to pay tax on income, but only pay Capital Gains Tax either:
Residence before April 2013
There were different rules for working out your residence status before 6 April 2013.