Non-Resident Tax Reliefs: Don’t Miss These UK Savings

Are you living abroad but still connected to the UK—maybe with a rental property, pension income, or investments? Non-resident tax reliefs could save you thousands of pounds in 2025, but most expats and overseas landlords don’t even realise they’re entitled to them.

Here’s the catch: if you don’t claim these reliefs, HMRC will happily take more than they should. In some cases, you could even be taxed twice—once in the UK and again in your new country of residence.

The good news? A little planning goes a long way. Whether you’ve moved overseas for work, retirement, or lifestyle reasons, you can still legally reduce (or even eliminate) your UK tax exposure.

In this insight, we’ll cover:

• The tax reliefs non-residents can still claim in 2025
• How Double Taxation Agreements stop you paying tax twice
• Which UK income is still taxable when you live abroad
• Quick wins to keep more of your money while you’re away

Think leaving the UK means leaving UK tax behind? Not always. Let’s clear up the confusion.

What You Need to Know Before Claiming Non-Resident Tax Reliefs

First, you need to know whether HMRC still considers you a UK tax resident. Just moving abroad doesn’t automatically change your tax status.

The UK uses the Statutory Residence Test (SRT) to decide if you’re still tax resident. You might still be UK resident if:

• You spend 183+ days in the UK in a tax year
• Your main home or family ties remain in the UK
• You work significant days in the UK

If you’re genuinely non-resident, your UK tax liability is only on UK-source income, such as:

• Rental income from UK property
• UK pensions
• Gains from selling UK property

Here’s where the reliefs kick in. Even if you’re non-resident, you may still:

• Claim UK personal allowances if you’re from an eligible country
• Use Double Taxation Agreements to avoid paying twice
• Offset property expenses and deductions as a non-resident landlord
• Time disposals and withdrawals to reduce Capital Gains Tax (CGT)

Many expats assume HMRC stops taxing them the moment they leave. In reality, if you have UK income, they still want their share—unless you know how to claim reliefs properly.

For more on how residency affects UK tax, see Non-Resident Tax in 2025.

Double Taxation Agreement Reliefs for Non-Residents

One of the biggest tools for non-residents is the Double Taxation Agreement (DTA).

Think of a DTA as a “tax passport” between the UK and your new country. It stops you being taxed twice on the same income—once by HMRC and again by your country of residence.

What Does a DTA Actually Do?

• Keeps more money in your pocket. If the DTA says your income is only taxable where you live, the UK won’t take an extra slice.
• Reduces or eliminates UK tax on certain income. Many DTAs reduce UK tax on pensions, dividends, and rental income—sometimes all the way to 0%.
• Simplifies tax reporting. Instead of juggling two tax bills, you’ll know exactly which country has taxing rights.

Which Income Can Be Relieved Under a DTA?

• Employment income – if you work abroad, you might be exempt from UK tax altogether.
• Rental income – some treaties reduce or offset UK rental tax.
• Pensions – many DTAs say pensions should be taxed only where you live.
• Investment income – dividends, interest, and royalties often get lower UK tax rates.

Real-Life Example

• James, a UK expat living in the UAE, receives a UK private pension. Under the UK-UAE DTA, that pension is taxed only in Dubai, which has no income tax—so HMRC gets nothing.
• Meanwhile, Sarah, who moved to France but rents out her UK property, can use the UK-France DTA to offset French tax against her UK rental tax, avoiding being taxed twice.

How Do You Claim DTA Relief?

It’s simpler than most people think:

• First, check if your country has a treaty with the UK via GOV.UK HS304 Non-Residents Relief.
• Request a certificate of tax residency from your local tax authority.
• Submit the completed DTA claim form to HMRC (often through your Self Assessment tax return).

DTAs don’t just apply to income—they can even reduce your UK inheritance tax exposure if you live abroad. See Inheritance Tax for Non-Residents.

Can Non-Residents Still Claim UK Personal Allowances?

Many expats don’t realise they can still claim the UK personal allowance—that tax-free slice of income (£12,570 in 2025) before tax kicks in.

Leaving the UK doesn’t always mean losing it. You may still qualify even as a non-resident.

Who Can Still Claim?

• UK citizens – you keep your personal allowance even if you’re living overseas.
• EEA nationals – if you’re from the European Economic Area, you’re still entitled.
• Residents of treaty countries – if your country has a DTA that allows it, you can claim.
• Former UK government employees – if you worked for the civil service, NHS, or armed forces abroad, you’re still covered.

Why Does It Matter?

The personal allowance can cut your UK tax bill on:

• Rental income from UK property
• UK pensions
• Other UK-source income

Instead of paying tax on every penny, the first £12,570 is tax-free—a big saving for landlords and retirees abroad.

Real-Life Example

Emma, a UK expat living in Canada, still rents out her old London flat. By claiming her personal allowance under the UK-Canada DTA, she wipes £12,570 of her rental income off her UK tax bill every year.

How Do You Claim?

1. Tick the personal allowance claim box in your UK Self Assessment return
2. If you don’t normally file, complete Form R43 or the relevant DTA claim form
3. Keep proof of your overseas residence ready

Don’t assume your allowance vanishes when you move abroad. Many non-residents miss this relief and overpay UK tax. For more tips, see our Tax Compliance & Planning services.

UK Property Reliefs for Non-Residents

If you own UK property while living abroad, HMRC still taxes certain income and gains. But with the right reliefs, you can legally cut your tax bill—whether you’re renting it out or selling it.

Rental Income Reliefs (Non-Resident Landlord Scheme)

As a non-resident landlord (NRL), letting agents or tenants normally deduct 20% basic-rate tax from rent before paying you.

You can avoid this by registering under the Non-Resident Landlord Scheme (NRLS).By doing so, you:

• Receive gross rent with no upfront tax deduction
• Still pay UK tax later via Self Assessment
• Can offset allowable expenses, such as mortgage interest, repairs, letting agent fees, and insurance

Example: Sarah, now living in Spain, rents out her London flat. By registering under the NRL scheme, she receives her rent gross, deducts £5,000 in property expenses, and only pays UK tax on the net amount. Under the UK-Spain DTA, she avoids being taxed twice.

Capital Gains Tax (CGT) Reliefs When Selling UK Property

Since April 2015, non-residents have been liable for CGT on UK residential property gains (and since April 2019 for commercial property). However, there are important reliefs that reduce what you owe:

• Private Residence Relief (PRR) – if it was once your main home, you can still claim relief for the time you lived there plus the final 9 months of ownership
• Rebasing relief – only the gain since April 2015 (residential) or April 2019 (commercial) is taxable
• Annual CGT exemption – even as a non-resident, you still get £6,000 tax-free in the 2024/25 tax year. Note that this is scheduled to reduce to £3,000 from April 2026. See HMRC CGT guidance for non-residents.
• DTA relief – offset UK CGT against taxes in your country of residence

Example: James, living in Australia, sells his UK flat. By rebasing the value to April 2015 and using his annual CGT allowance, he cuts his taxable gain by thousands.

Timing matters. Selling too soon—or too late—could cost you more tax than necessary. For tailored advice, see Tax Compliance & Planning services.

Pension Reliefs and Quick Planning Tips

Your UK pension can still be taxed even after you’ve moved abroad—but Double Taxation Agreements (DTAs) can change the rules in your favour.

Pension Tax Rules for Non-Residents

• State pensions – usually taxable in the UK unless a DTA says otherwise
• Private/workplace pensions – many DTAs tax these only in your country of residence
• Government service pensions (e.g. NHS, civil service, armed forces) – remain taxable in the UK regardless of where you live, because the UK retains taxing rights under most treaties.

Example: Helen, a retired NHS nurse in Dubai, still pays UK tax on her NHS pension. But her private pension is tax-free in the UAE under the UK-UAE DTA.

Quick Planning Wins for 2025

• Time your moves – use split-year treatment to avoid unnecessary UK tax
• Claim every relief – DTAs, personal allowance, and property expense deductions
• Rebase property values – for CGT, only gains after April 2015/2019 are taxable
• Prove your residency – always get a tax residency certificate from your new country. If you have multiple income sources, large pensions, or property portfolios, seek professional advice to avoid penalties and maximise available reliefs.

Common Pitfalls to Avoid

• Assuming HMRC stops taxing you as soon as you leave
• Missing out on treaty reliefs and overpaying tax
• Forgetting to register under the Non-Resident Landlord Scheme
• Selling property without claiming rebasing or PRR relief

A little planning can save thousands in unnecessary UK tax—and avoid nasty surprises from HMRC.

Get in touch

Not sure which non-resident tax reliefs you’re entitled to? Or worried you’re paying more UK tax than you should?

Nichols & Co specialise in non-resident tax planning, Double Taxation Agreements, and UK property & pension reliefs.

Contact us today for a personalised non-resident tax review and keep more of your money in 2025.

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Disclaimer: This article is for general information purposes only and does not constitute personalised tax, legal, or financial advice. Tax residency, reliefs, and treaty benefits are subject to change and depend on your individual circumstances. Always seek tailored advice from a qualified tax adviser before making any decisions about UK non-resident tax planning.

Nichols & Co are chartered accountants and tax advisers with expertise in non-resident tax reliefs, UK property taxation, and double taxation agreements. We regularly assist expats, non-resident landlords, and high-net-worth individuals with complex UK tax reporting and planning strategies.