Your tax questions answered

Q. Why am I paying tax in the UK on my income when I am no longer a resident there?

A. Firstly – check your residency status. You need to leave the UK for least one full tax year to break your UK residency, and even then you may still be treated as resident if you make regular visits to the UK. So, if
you are treated as resident in the UK for tax purposes you will be charged to UK tax on your worldwide income.

If you do become a non-resident in the UK for tax purposes you will still be liable to pay UK tax on income arising in the UK, such as profits from a UK rental property, UK bank interest and UK pension income.

The UK tax payable by non-residents on investment income, such as bank interest, is restricted to that deducted at source and, in some cases, can be reduced to nil. UK tax on some other sources, such as pension income, may also be exempt under the Double Taxation Agreement (DTA) between the UK and your new country of residence, but this depends on the terms of each DTA.

Note, however, relief from UK tax under a DTA requires an application to HMRC.Forms are available for residents of countries with which the UK has a comprehensive Double Taxation Treaty, on the HMRC website.

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