Foreign Citizens Living in the UK

Our textbooks are full of definitions of wonderful terms like domicile. Our library of double taxation treaties massive…

The fact is that most foreign citizens living in Britain will have to pay UK tax on income and gains arising in the UK, and on income remitted from abroad.

The manner in which any income from employment will be taxed depends on many factors, including where the employer is based, whether the duties are performed in the UK, and the precise residence position of the employee. There are also different National Insurance provisions, depending on the double taxation treaty in force with the country of domicile.

Pensions and investment income (apart from UK government securities which depend on the residence position year on year) paid in the UK are liable to UK tax, while those paid abroad are liable to tax when the income is brought into the UK.

Income from self-employment is taxable in the UK if any part of it is carried on here, while profits from a trade carried on wholly outside the UK are again only taxable when they are brought in to the UK.

Capital gains tax works in the same way with gains on UK assets being liable to tax while overseas assets are only liable if the proceeds are received in the UK.

Hornbeam can advise on the liability to UK tax of income arising worldwide, and of course prepare your UK tax return, as well as provide details of methods of arranging your affairs so that monies brought into the country can be identified as capital rather than income liable to tax.