|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|
UK residents who have their permanent home (‘domicile’) outside the UK may not have to pay UK tax on foreign income.
The same rules apply if you make any foreign capital gains, for example you sell shares or a second home.
Working out your domicile
Your domicile’s usually the country your father considered his permanent home when you were born. It may have changed if you moved abroad and you don’t intend to return.
If you need help working out which country you’re domiciled in, you can:
- read chapter 5 of HM Revenue and Customs’ (HMRC) guidance on ‘Residence, Domicile and the Remittance Basis’
- get professional tax help, for example from a tax adviser
There are additional rules for domicile and Inheritance Tax.
Tax if you’re non-domiciled
You don’t pay UK tax on your foreign income or gains if both:
- they’re less than £2,000 in the tax year
- you don’t bring them into the UK, for example you transfer them to a UK bank account
If this applies to you, you don’t need to do anything.
Chapter 9 in HMRC’s guidance on ‘Residence, Domicile and the Remittance Basis’ explains the rules for bringing income or gains to the UK.
If your income is £2,000 or more
You must report foreign income or gains of £2,000 or more, or any money that you bring to the UK, in a Self Assessment tax return.Posted on: 13th December 2016, by : ICS Legal