Generally, the UK tax system taxes anyone who is resident in the UK on their worldwide income and gains. On the other hand, if you are non-resident, your foreign income and gains are not subject to UK tax. Therefore, only UK resident individuals will need to consider a possible UK tax liability on their foreign income and gains.
For tax years to 2024/25, if you are UK resident but non-domiciled, the amount of UK tax you have to pay on foreign income and gains may depend on whether or not you bring money or assets into the UK.
From 2017/18 to 2024/25 inclusive, the law treats some individuals who are not UK domiciled as if they are domiciled (‘deemed domiciled’) in the UK for income tax and capital gains tax purposes.
UK resident taxpayers should usually consider the following steps when working out if UK tax is due on their foreign income and gains:
1) What is the position under UK domestic law?
2) If the income is taxable under UK domestic law, what is the position under any relevant double taxation agreement?
3) If the income or gain is taxable in the UK after considering the above, how can any double taxation be relieved?
The position under UK domestic law will depend on:
1) For tax years up to and including 2024/25, whether you are UK domiciled, and if you are non-domiciled, whether the remittance basis applies to the income.
2) For tax years 2025/26 onwards, whether relief is claimed for foreign income and/or gains which may be available under the new regime from 6 April 2025.
Bringing money to the UK
In general, the only occasion you might need to pay UK tax on money which you bring to the UK is where that money represents foreign income or gains that arose in tax years (up to and including 2024/25) for which you were UK resident and taxable on the remittance basis. This is still the case even if the remittance occurs after 5 April 2025.
If you are resident in the UK after 6 April 2025 and you were previously taxed on the remittance basis, you may be eligible for the Temporary Repatriation Facility. This will allow you to remit prior year income to the UK at a special low rate of tax.
If you make a transfer to the UK from an overseas savings account which earns interest, you are likely to be deemed to remit some of the foreign interest income with any transfer to the UK from that account. This could trigger an unexpected tax liability in the UK, so you should seek advice before you do so.
Note that if you are bringing physical cash into, or out of, Great Britain and it exceeds £10,000 (or 10,000 Euros, in the case of Northern Ireland), you must declare it.
Undisclosed foreign income and gains
You may have received a letter saying that HMRC’s information indicates you currently have or previously had offshore income or gains, and if you have additional tax to pay, to tell HMRC using the worldwide disclosure facility (WDF).
If you have undisclosed UK tax liabilities in relation to offshore income and gains for tax years 2015/16 and earlier, and you did not disclose this to HMRC by 30 September 2018, you may be liable to penalties under the requirement to correct regime.
The new FIG regime
The new regime for foreign income and gains (FIG) applies from 6 April 2025 and replaces the remittance basis for non-domiciled taxpayers. Domicile is no longer relevant to your tax liability from 6 April 2025. Instead, the new regime is available to qualifying new residents (see heading below).
This means that some UK domiciled taxpayers may be eligible for relief under the FIG regime, even though they may not have been eligible for the remittance basis in prior years. Similarly, non-domiciled taxpayers will not be eligible for relief under the regime if the residence conditions are not met, even if they were previously eligible for the remittance basis.
The new rules mean that almost all UK resident taxpayers now need to report their foreign income and gains to HMRC, if they didn’t previously. This is the case even if relief is claimed under the new regime. The only exception is where no UK tax is due on the foreign income and the taxpayer is not otherwise required to file a self assessment tax return for the year.
If income or gains are relieved from UK tax under the new regime, then it does not matter if the income or gains are remitted to the UK.
Under the FIG regime, there are three separate possible claims:
- A foreign income claim
- A foreign employment election (we cover this in our page on overseas workday relief)
- A foreign gain claim
If you are a qualifying new resident (see below) for a tax year, you can choose to make any combination of the above claims or elections for that year (or none at all). However, claiming any one will mean that you are not entitled to all of the following for the year of claim:
This means that, for example, the income tax personal allowance is lost for that year even if only a foreign gain claim is made and not a foreign income claim.
In addition, claiming any one of the three claims or elections will mean that foreign income losses (for example, from a foreign trade or foreign property business) and foreign capital losses cannot be claimed for that year.
The above means that making a claim or election under the FIG regime will not always be worthwhile. If you are a qualifying new resident and you have foreign income and gains, you should seek advice to determine if a claim is beneficial.
If foreign income or gains from 6 April 2025 are not relieved from UK tax under the FIG regime, they will be in scope of UK tax just like UK income and gains. Where this is the case, double taxation relief should be considered to reduce any double taxation arising.
Qualifying new residents
You may claim relief under the new regime for a tax year if:
- You are UK resident for that tax year, and
- For each of the 10 years before that tax year, you were not resident in the UK.
You can also claim relief for each of the following three tax years (if you are UK resident in these years).
The FIG regime is therefore available for a maximum of four consecutive tax years immediately following a period of non-residence for at least 10 consecutive tax years.
Individuals who became resident in the UK prior to 6 April 2025 may still claim relief for tax years 2025/26 onwards, provided that the residence conditions are met. For example, a taxpayer who first becomes resident in the UK in 2023/24 (year one) will be eligible to claim the relief for 2025/26 and/or 2026/27 (years three and four) if they are still resident in the UK in these years.
Making a claim
Claiming one or more of the three possible claims or elections under the FIG regime is made in a self assessment tax return for the year of claim.
The deadline for each claim is 31 January in the second year following the tax return of claim. For example, claims for the 2025/26 tax year must be made by 31 January 2028.
Where a claim is made, you must identify on the return the income or gains which are being relieved from UK tax by virtue of the claim. These amounts are then deducted from the amounts charged to UK tax when your tax liability is calculated. This is different from what was the case for unremitted income under the remittance basis, which in general did not need to be reported on a tax return.
These deductions do not affect the calculation of your adjusted net income, which is used to work out:
Small amounts of foreign income and gains
Prior to 6 April 2025, non-domiciled taxpayers with less than £2,000 of unremitted foreign income and gains for a tax year would not need to report or pay UK tax on that income. This is because the remittance basis would apply automatically.
However, this is no longer the case from 6 April 2025. If you are UK resident and you have small amounts of foreign income or gains, and you file a self assessment tax return, you will usually need to report these amounts on your self assessment tax return for the year (there are some exceptions if you only have foreign gains and no UK capital gains tax to pay).
If you do not file a self assessment tax return, you will need to consider whether you owe UK tax on the foreign income or gains in the absence of a FIG claim or election. If you do, then you should usually register to file a self assessment tax return to report the income or gains and either pay the tax or make the claim. This is the case however small the tax liability on the income.
If you do not owe any UK tax on the income in the absence of a FIG claim or election, then you will not need to register for self assessment just to report the income (provided you have no other reason to file a return). This might apply if, for example, your worldwide income is within your UK personal allowance (and blind person’s allowance, if applicable).
Depending on the source of foreign income, it may be covered by allowances or nil rate bands. For example, for small amounts of foreign interest, remember the interest may be covered by the personal savings allowance or the starting rate for savings (you should add together your foreign interest and UK interest to determine if this is the case). Similarly, foreign dividends may be covered by the dividend allowance.
Small foreign gains may be covered by the capital gains tax annual exempt amount.
