Do I need to File a UK Tax Return If I Live Abroad?

Moving to a different country can mark significant changes, not only in the way you live but in the way you manage your tax returns. Let's take a closer look at this topic to help you understand your UK tax obligations having moved abroad.

Arjun Kumar
Arjun Kumar
Sep 11, 2023

Do I need to File a UK Tax Return If I Live Abroad?

If you move abroad, your tax status changes to non-resident, and you pay taxes as a resident in the country you move to. But what if you still have an income in the United Kingdom (UK)? The answer is not quite straightforward as it depends on different factors like residency status and type of income. Let's delve deeper into the topic and gain a comprehensive understanding of your tax obligations as a UK expatriate:

Determining residency status

Your residency status plays a crucial role in determining whether you need to file a UK tax return. If you are considered a UK resident, you need to report your worldwide income and gains, regardless of their source.

If you are considered a non-resident, you usually only need to report income and gains sourced in the UK. Most commonly, this is UK property income or gains - but could also be due to workdays in the UK. You must inform the HM Revenue and Customs (HMRC) that you either plan to leave the UK permanently or at least for one full tax year. How you inform the HMRC depends on your employment status and whether or not you file a Self Assessment tax return.


How to inform HMRC?

If you don’t usually file a Self Assessment tax return, you can inform HMRC using form P85. You can use the online version if you’ve already left the UK or an offline version if you’re still in the UK. However, if you do file a Self Assessment tax return you can inform the HMRC of your residency status by completing form SA109 and sending it by post.

An SA109 can not be directly submitted from the HMRC website, but there are online HMRC-approved software like Taxd that can help you file your non-residence tax returns. If your residency status is non-resident might have to pay taxes on your UK-based income generated from:

  • capital gains.
  • rental properties.
  • workdays.

Let’s look at them in more detail.

You are a non-resident landlord

If you receive rental income from the property in the UK, your tenants or letting agents will have to comply with the Non-resident Landlords scheme. This means that your tenant/letting agent will deduct tax from the rent before you receive it. As a non-resident landlord, when you complete your UK Self-Assessment tax return, you claim the amount your tenants have paid as a deduction against your tax liability. You can file an NRL1 form to receive the income without any tax being withheld.

You have capital gains in the UK

The gains on your capital assets in the UK must also be reported to HMRC. Such gains must be reported because they result from a UK based transaction - such as land and property. When reporting capital gains, you will have to use the SA100 Tax Return, SA109, and the SA108 capital gains form. You may also need to file a Real Time Transaction (RTT) return to report the Capital Gains when the gain takes place.

You are non-resident but have worked in the UK

Despite being a non-resident, you’re subject to UK-based taxation if you have worked in the UK during that tax year and have earned income. In such cases, you will need to use:

  • Form SA100 Tax Return
  • Supplementary form SA102 Employment
  • Supplementary form SA103 Self Employment (if you are a sole trader with UK workdays)
  • Supplementary form SA109 Residence, Remittance etc to declare your residence status.

You may also work for a UK Limited Company whilst abroad, then you would report the UK Employment Income here, but mark all the workdays as foreign - so you would not be subject to UK tax. If tax was withheld through Pay As You Earn (PAYE), you’ll likely be due a refund!

Take Away

If you are a non-UK resident and have income sourced in the UK, you have to fill out the SA100 tax return, along with the supplementary form SA109. The main SA100 can be submitted directly to HMRC. However, the SA109 cannot be submitted using the HMRC, which makes it challenging for non-residents to comply with their tax obligations.

At Taxd, we’ve simplified the process of filing UK tax returns and made it highly affordable for non-residents worldwide. Get in touch with us today, and learn more about how we can help you file your UK tax return with ease.

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