Tax on foreign income for UK residents: rules from April 2025

Whether you pay UK tax on income from abroad depends first on whether you are UK resident. If you are, the UK normally taxes all your income wherever it arises, with relief for foreign tax already paid. The old remittance basis for non-domiciled residents ended on 5 April 2025 and was replaced by a much narrower regime for recent arrivals.

Residence decides everything

Your UK residence status is set by the Statutory Residence Test for each tax year. In outline:

• you are non-resident if you spend fewer than 16 days in the UK (46 days if you were not resident in any of the previous three tax years), or you work full-time abroad and spend fewer than 91 days in the UK, of which no more than 30 are working days
• you are resident if you spend 183 days or more in the UK, your only home is in the UK, or you work full-time in the UK
• otherwise, residence depends on the number of days you spend here and your ties to the UK, such as family, accommodation, work and time spent in previous years

Non-residents pay UK tax only on UK income; see Income Tax for non-UK residents. Residents pay on worldwide income, as this guide explains. In the year you arrive or leave, split-year treatment may divide the year into resident and non-resident parts.

What foreign income is taxable

If you are UK resident and not claiming the 4-year regime, you are taxed on foreign income as it arises, whether or not you bring it into the UK:

Income is converted into sterling at the exchange rate on the date it arises, or an average rate for the year where appropriate. The Channel Islands and the Isle of Man count as foreign for this purpose.

The 4-year foreign income and gains regime

From 6 April 2025, the remittance basis for non-domiciled individuals was abolished and domicile stopped being relevant to Income Tax and Capital Gains Tax. In its place is the 4-year foreign income and gains (FIG) regime.

Who qualifies

You are a qualifying new resident if:

• you are UK resident under the Statutory Residence Test, and
• you are within your first four tax years of UK residence, following at least ten consecutive tax years of non-residence

People who arrived before 6 April 2025 can use whatever is left of their first four years from 2025/26 onwards.

How it works

• You claim relief on your Self Assessment return for each year, choosing which foreign income and gains to include.
• Qualifying foreign income and gains are not taxed in the UK, even if you bring them into the UK.
• Foreign employment income is not covered, but Overseas Workday Relief may apply to pay for work done abroad.

What claiming costs

In any year you claim, you lose the Personal Allowance and the Capital Gains Tax annual exempt amount, as well as Marriage Allowance, Married Couple’s Allowance and Blind Person’s Allowance. Claimed foreign income still counts towards adjusted net income for the High Income Child Benefit Charge and childcare support. For someone with modest foreign income, claiming can cost more than it saves.

Temporary Repatriation Facility

Former remittance basis users can designate foreign income and gains from before April 2025 and pay a reduced charge of 12% in 2025/26 and 2026/27, rising to 15% in 2027/28, after which the funds can be brought to the UK without further tax.

Avoiding double taxation

Foreign income has often been taxed in the country where it arose. You can usually claim foreign tax credit relief on your UK return, which reduces the UK tax on that income by the foreign tax paid, up to the amount of UK tax due on it.

Example: a UK resident higher rate taxpayer receives £5,000 of rent from a flat abroad and pays the equivalent of £950 in local tax on it. UK tax on the rental profit, after expenses of £1,000, is £1,600 (40% of £4,000). Credit for the foreign tax reduces this to £650.

Double taxation agreements between the UK and other countries decide which country has the main right to tax each type of income and may reduce foreign withholding taxes, for example on dividends and interest.

Reporting foreign income

• Most foreign income must be reported on the foreign pages (SA106) of a Self Assessment return, and you must register by 5 October after the end of the tax year if you do not already file.
• You do not need to report foreign interest or dividends below the relevant allowances in some cases, but rental income, employment income and gains above the exemption must be reported.
• The 4-year regime and foreign tax credit relief are both claimed on the return.

Our guide to how to register for Self Assessment covers the steps.

Frequently asked questions

Do I pay UK tax on foreign income if I live in the UK?

Usually yes. UK residents are taxed on worldwide income, with relief for foreign tax already paid. Recent arrivals may qualify for the 4-year foreign income and gains regime.

Has the non-dom regime ended?

Yes. The remittance basis ended on 5 April 2025. Domicile is no longer relevant for Income Tax or Capital Gains Tax; the 4-year regime is based on residence.

Who qualifies for the 4-year foreign income and gains regime?

UK residents in their first four tax years of residence after at least ten consecutive tax years of non-residence.

How do I avoid being taxed twice on foreign income?

Claim foreign tax credit relief on your Self Assessment return. It reduces your UK tax on the income by the foreign tax paid, up to the UK tax due on that income.

Is foreign rental income taxed in the UK?

Yes, for UK residents. It is taxed as an overseas property business, separately from any UK property business, with credit for foreign tax paid.