Expatriates (“expats”) need to ensure they manage their UK tax position carefully.
The major UK tax considerations for a an expat are outlined below:
- Optimising the benefit of the foreign income and gains (FIG) rules which will introduced from 6 April 2025 onwards.
- Overseas workday relief – if you meet specific criteria your foreign workdays could be exempted from UK tax during the first four tax years you are resident in the UK (three years prior to introduction of FIG rules).
- Relief for qualifying travel expenses – If you are an expat and have been seconded to work in the UK you may be entitled to tax reliefs which could compensate you for associated travel, accommodation and subsistence costs incurred during your secondment. This is often referred to as “Detached Duty Relief”.
- Are you UK resident – If you are not permanently based in the UK and only travel here for short term business visits you may be a non-resident and subject to UK tax on UK source earnings only. This can prove very valuable for expats, employed by a UK company who spend significant time overseas.
- Are you Dual resident – If you are resident in the UK and a second country which has a Double Taxation Agreement with the UK. It may be possible to claim treaty relief and restrict UK taxation with reference to UK source income only or a more favourable position.
- Double tax relief – If you have income arising from overseas (e.g. a foreign rental property) it is important to take steps to ensure you are not double taxed and mitigate tax exposure in accordance with any applicable tax treaty.
- Tax efficient investments – Have you made or are you considering making significant investments in UK companies? Did you know that you could make tax efficient investments that reduce your tax bill on investment and are potentially exempt from capital gains tax on a later disposal.
- Entrepreneur’s relief for disposing of a stake in an overseas business – If you dispose of an interest in a business that you were employed by you could be entitled to a favourable capital gains tax rate (on a maximum value of £1m of gains) provided certain criteria are met.
If any of the above circumstances apply to you or you are uncertain over any aspect of your UK tax status please contact us via the form at the bottom of this page.
