Tax on your UK income if you live abroad

There are people that believe that if they live outside the UK they don't need to declare income to HMRC. If you have income derived from within the UK then it must be declared and any taxes dues must be paid. Here are a few examples of the types of income:

• pension 
• rental income
• savings interest 
• wages

You pay Income Tax on income above your tax-free limit (‘Personal Allowance’), if you’re eligible for it, eg you have a British passport.

The country where you live might tax you on your UK income. If it has a ‘double-taxation agreement’ with the UK, you can claim tax relief in the UK to avoid being taxed twice.

When tax isn’t due or is already deducted 

• the State Pension 
• interest from UK government securities (‘gilts’) 

If you live abroad and are employed in the UK, your tax is calculated automatically on the days you work in the UK.

Tax on your savings interest is deducted by your bank or building society unless you give them form R105. 

When to report your income to HMRC

• you rent out property in the UK 
• you work for yourself in the UK 
• you have a pension outside the UK and you were UK resident in one of the 5 previous tax years 
• you have other untaxed income You don’t need to report your income to HMRC if you’ve already claimed tax relief under a ‘double-taxation agreement’.

Sending a Self Assessment tax return

• send your tax return by post
• use software 
• get help from a professional, eg an accountant 

Fill in the ‘residence’ section (form SA109 if you’re sending it by post) to tell HMRC you’re non-resident. Fill in any sections relating to your type of income.

You’ll be fined if you miss the deadline - it’s earlier if you’re sending your return by post (31 October).

If you’ve overpaid
Apply for a refund if you think you’ve paid too much tax. This might happen if tax is deducted automatically (eg by your bank) but your total UK income is below your Personal Allowance.

Send form R43 to HMRC, or claim the refund in your Self Assessment tax return if you’re already doing one.