UK Non-Resident Tax Rules: What Income Remains Taxable

Leaving the UK does not end your UK tax position. Under UK non-resident tax rules, you stop paying UK tax on foreign income, but UK income such as rent, wages and many pensions usually stays taxable.

The tax you pay depends on your income, your country of residence and whether you can claim a Personal Allowance. This guide covers individuals who are non-resident for a full tax year.

First, Check You Are Non-Resident

Living abroad does not automatically make you non-resident. The Statutory Residence Test looks at your days in the UK, your work and your UK ties.

You will usually be non-resident if you spend fewer than 16 days in the UK in the tax year, or fewer than 46 days if you were not UK resident in the previous three tax years. Full-time work abroad can also make you non-resident if you meet the day limits.

You may get split-year treatment in the year you leave, which divides that tax year into a UK part and an overseas part. Conditions apply, so check them before you assume they cover your move.

What Non-Resident Tax Rules Mean for Your Income

This table shows the usual position. A double taxation agreement can change the result.

Income	Usual UK position
Foreign income	No UK tax
UK employment	Taxable for the days you work in the UK
UK self-employment	Usually taxable, and you usually need to file a tax return
UK rent	Taxable
Workplace and private pensions	Usually taxable, unless an agreement gives taxing rights to your country of residence
Most UK government pensions	Usually taxable only in the UK
State Pension	Usually no UK tax
Interest on gilts	Usually no UK tax
Bank interest and UK dividends	UK tax limited, as explained below

Savings, Dividends and the Limit on Your Tax

The UK limits the tax on some investment income, which HMRC calls disregarded income. It includes bank interest, UK dividends, unit trust income and certain state pensions. Your UK tax on this income cannot exceed any tax deducted at source.

The limit has a trade-off. If it applies, you do not get a Personal Allowance against your other income. HMRC says some people pay less by calculating their tax as if they were UK resident, so compare both results.

If You Rent Out UK Property

HMRC usually treats you as a non-resident landlord if you live abroad for 6 months or more. This can apply even if you remain UK resident for tax.

Your letting agent must deduct basic rate tax from your rent after allowing for certain expenses. If you have no agent, your tenant must deduct it when the rent is over £100 a week. To receive your rent in full, apply to HMRC using form NRL1i. HMRC can refuse if your tax affairs are not up to date.

Either way, you normally still need to complete a tax return. Our guide for non-resident landlords covers the practical steps.

The government also plans to raise property income rates to 24%, 44% and 49% in England, Wales and Northern Ireland from 6 April 2027. This still needs to pass through Finance Bill 2026-27.

Selling UK Property and Other Assets

Non-residents do not usually pay UK Capital Gains Tax on most assets, including UK shares. The main exceptions are UK land and property, and assets used in a UK branch of a foreign business.

You must report a disposal of UK property or land even if you made a loss or have no tax to pay. For UK residential property, you must report and pay within 60 days of completion. Double taxation agreements do not apply to tax on gains from UK residential property.

Our guide to CGT for non-UK residents explains these rules in more detail.

If You Return Within 5 Years

Temporary non-residence rules can bring gains made while you were abroad into UK tax when you return. They can apply if you were solely UK resident for at least 4 of the 7 tax years before you left and return within 5 years.

The rules also cover certain income. For people returning on or after 6 April 2026, a Budget 2025 measure brings all dividends from UK close companies received during this period within the charge. This matters if you own a family or owner-managed company and plan to take dividends while abroad.

Your Personal Allowance and Double Taxation

You can claim a Personal Allowance as a non-resident if you are a British citizen or an EEA citizen, or if you worked for the UK government during the tax year. Some double taxation agreements also give an entitlement. You must claim it each year, using form R43 or your tax return.

If both countries tax the same income, a double taxation agreement may provide relief. You may be able to claim it before tax is paid or as a refund, and you usually apply through the tax authority in your country of residence.

What You Need to Report

You usually need to file a Self Assessment tax return if you have UK rent, self-employment, taxable savings interest or other untaxed UK income.

You cannot use HMRC’s standard online service for this. Instead, you can send a paper return with form SA109 by 31 October, use commercial software or ask an adviser to file for you.

The government also plans to exempt expected non-residents from Making Tax Digital for Income Tax until further notice. It intends to introduce the regulations before April 2027.

How Nichols & Co Can Help

Nichols & Co can review your residence position, your UK income and any tax return you need to file as part of our tax compliance and planning service.

If you are planning to leave the UK or already live abroad, contact Nichols & Co to check what remains taxable.