Our Guide To UK Tax For Non-Residents

According to the tax legislation in the UK, determining your status as a non-resident for tax purposes involves the Statutory Residence Test, as outlined in FA 2013. This guide will help you navigate the complexities of UK tax for non-residents, including important considerations like the duration of physical presence in the UK, the impact of various connections or 'ties' to the UK, and how these factors affect your tax obligations.

Just because you are not resident in the UK under the test, this does not mean that you will not be subject to UK taxes for non-residents.

A Review of the Rules

UK tax laws mean you may still be able to spend a number of days in the UK without triggering UK residence.

ASWATAX can conduct an assessment of the Statutory Residence Test tailored to your individual circumstances. Our analysis determines how many days you can be present in the UK before gaining resident status. We have extensive expertise in this area.

Split Year Treatment

Individuals arriving in or departing from the UK during a tax year might be eligible for split-year treatment.

These complex UK non-resident tax rules benefit individuals who would otherwise qualify as residents for the full tax year, allowing them to split the tax year into residency and non-residency periods.

Individuals arriving in or departing from the UK during a tax year might be eligible for split-year treatment.

Pre-Arrival Tax Planning

Non-resident individuals that are coming to the UK should undertake careful planning and arrange their affairs appropriately in a tax efficient manner.

ASWATAX can assist with UK tax for foreigners for those individuals preparing to come and live in the UK. We can also assist overseas investors who own UK land and property.

Capital Gains Tax for Non-Residents

UK capital gains tax for non-residents is more complex. Generally speaking, non-residents are not chargeable to UK capital gains tax but there are a number of exemptions to this rule, one of which is the temporary non-residency rules.

Individuals whose period of non-residence is five years or less, and who were sole UK resident in four of the seven tax years before their departure, will be subject to UK capital gains tax when they return to the UK. If individuals held assets at the time of their departure from the UK and disposed of them during their non-resident period, they must pay UK capital gains tax upon their return.

Disposals of UK Property

UK property is also subject to UK capital gains tax regardless of your residency position. Sales must be notified to HMRC within 60 days of completion.

Penalties and interest will be levied for late payment and submission so if you require assistance, please do get in touch and we will be able to assist with your filing obligations.

Inheritance Tax for Non-Residents

From 6 April 2025 domicile no longer decides UK tax. The remittance basis was replaced by a 4-year foreign income and gains (FIG) regime for people arriving after 10 consecutive years of non-residence. Inheritance tax now depends on long-term residence: UK resident in at least 10 of the previous 20 tax years. After leaving, exposure continues for a 'tail' of 3 to 10 years, depending on how long you were resident. UK assets are always within UK IHT.

There are a number of inheritance tax planning opportunities for non-residents to consider to reduce the UK inheritance tax exposure. Our strategies are well-versed and undertaken for clients previously.

Double Taxation and Tax Treaties

UK and overseas tax could become due where income arises in one jurisdiction and the individual is resident in another, or where an individual is a dual resident. If there is a double tax treaty in place between the two countries, this can be used to prevent double taxation from occurring.

ASWATAX possesses significant expertise in providing advice on UK taxes for non-residents, particularly in the application of double tax treaties that the UK has with various jurisdictions.

Key Tax Considerations for Non-Residents

Generally, individuals who are not resident in the UK will only be subject to tax on their UK sources of income (and possibly capital gains).If you are a British citizen (or a citizen of another EEA country), you still qualify for a tax-free personal allowance.

Individuals can use the disregarded income rules to restrict their UK tax liability to the amount of UK tax withheld at the source.