Foreign income that’s taxed differently

1:Overview 2:Paying tax on foreign income
3:UK residence and tax 4:Foreign income that’s taxed differently
5:If you come to study in the UK 6:If you come to study in the UK
7:’Non-domiciled’ residents

Most foreign income is taxed in the same way as UK income, but there are special rules for:

  • pensions
  • rent from property
  • certain types of employment income


You have to pay tax on pensions if you’re resident, or were resident in any of the 5 previous tax years.

You’ll usually only pay tax on 90% of your foreign pension payments (10% is exempt from tax). Check with your pension provider to find out how you’ll be taxed.

You pay UK tax on unauthorised payments from your foreign pension, such as some lump sums and early payments.

Rent from property

You pay tax in the normal way on overseas property. But if you rent out more than one, you can offset losses against other overseas properties.

Certain types of employment income

You usually pay tax in the normal way if you work both in the UK and abroad. There are special rules if you work:

  • on a ship or in the offshore gas or oil industry
  • for the EU or government, or as a volunteer development worker
Posted on: 13th December 2016, by : ICS Legal