Working abroad: Getting your UK tax residence right

Spending time overseas for work is increasingly common, whether through relocation, remote working, or returning to the UK after a period abroad. However, many individuals underestimate how far UK tax rules can follow them. Leaving the UK does not automatically end your UK tax residence, and becoming non-resident does not by any means remove all your UK tax obligations.

At the centre of this issue is the Statutory Residence Test (SRT), which determines whether you are classed as a UK resident for tax purposes. The test considers factors such as the number of days spent in the UK, whether you have a home available, and the extent of your connections or “ties” to the UK. These ties can include family, accommodation, work, and past presence. Getting the day count or ties wrong can result in unexpected UK tax exposure on worldwide income and gains.

Even if you become non-UK resident, certain UK tax liabilities will always remain. Income from UK property, work performed in the UK, and some investment income may still be taxable, and disposals of UK property must be reported within strict deadlines.

A key recent development is the new foreign income and gains (FIG) regime, introduced from 6 April 2025. This replaces the remittance basis that was available to non-UK domiciled individuals (non-doms) and allows qualifying new or returning UK residents to claim relief on eligible foreign income and gains for their first four years of UK residence. To qualify, individuals must generally have been non-UK resident for at least 10 consecutive tax years. However, claiming FIG relief means giving up the UK personal allowance and Capital Gains Tax annual exemption, so careful cost-benefit analysis is essential before making any claim.

Ultimately, managing UK tax residence requires careful record-keeping and early planning. Decisions made before departure or before returning can have lasting financial consequences, making professional advice invaluable.

If you have any questions, please contact Steven Martin using the details below.