Income Tax is generally payable on taxable income received by individuals in the UK, including earnings from employment, earnings from self-employment, pensions income, interest on most savings, dividend income, rental income and trust income.
However, if you are resident in the UK you will also need to pay UK Income Tax on your foreign income, such as:
- wages if you work abroad
- foreign investments and savings interest
- rental income on overseas property
- income from pensions held overseas
Foreign income is defined as any income from outside England, Scotland, Wales and Northern Ireland. The Channel Islands and the Isle of Man are classed as foreign
If you are not UK resident for tax purposes, you may not be required to pay UK tax on your foreign income. There are special rules if you work both in the UK and abroad.
Planning note
The rules become more complex if we consider the liability to UK Income Tax for non-domiciles spending a substantial amount of time in the UK. New measures came into effect from April 2017, whereby any person who has been resident in the UK for more than 15 of the previous 20 years will be deemed to be domiciled in the UK for tax purposes. Some other Non-doms living in the UK that wish to retain access to the remittance basis of taxation must pay an additional sum in addition to the tax on any income or gains remitted. This sum is known as the Remittance Basis Charge.
If you are concerned that any of these issues affect you, we would be happy to discuss your options.
