If you live in the UK and have income earned outside the UK, you may need to be aware of tax issues.

Once you have income outside the UK, determining whether you need to pay tax is an important step.

You may want to find out what circumstances need to be claimed and what expenses can be claimed for tax credits relief.

Determine Your Identity

When you generate income outside the UK, you need to consider whether you will pay tax in the UK on your overseas income.

  • If you have been in the UK for 183 days in the previous tax year, you are considered a UK resident.

UK residents pay tax not only on UK income, but also on overseas income.

  • If you have lived in the UK for less than 16 days (depending on your residence record) and have a full-time job overseas, you are considered a non-UK resident.

Non-uk residents only pay income tax on domestic income and not on overseas income.

income tax

What are the circumstances for UK residents to pay tax?

  • If you work abroad and have income
  • Foreign investment income, such as dividends and interest on savings
  • Rental income from overseas properties
  • Overseas pension income

No need to pay for income

  • If you qualify as a UK resident, the following may still not be taxable:
  • Your only foreign income is dividends
  • Your total dividend (including UK dividend) is less than £2,000 dividend allowance
  • Other than dividends, you have no other income to report
Income tax

How to declare overseas income

Declaring overseas income is usually done by UK residents through a self-assessment tax return.

When you complete your return, fill out the “foreign” section to record your overseas income or earnings.

In some cases, HMRC may have already collected some of the tax.

In order to avoid double taxation, you can also consult our accounting team when filling out the tax credit.