Tax on Foreign Income in the UK | Declare Overseas Earnings with Ease

In a globally connected world, it's more common than ever for people in the UK to earn income from overseas — whether it’s from a freelance gig, a rental property abroad, or dividends from a foreign investment. But here's the big question:

Do you have to pay UK tax on money earned abroad?

Short answer: Yes — if you're a UK tax resident, most of the time you do.

What Counts as Foreign Income?

Foreign income is any income that is earned outside the UK, and it can be received in many different forms, such as:

• Salary from working abroad
• Rental income from a property abroad
• Dividends or interest from non-UK banks or shares
• Gains from selling foreign assets
• Overseas pensions or inheritance

Really, if it's money you earned overseas — it likely counts.

Do You Need to Pay UK Tax on It?

It all depends on two things:

1. Are you a UK tax resident? If so — then you're usually taxed on your worldwide earnings, even if: the funds remain overseas,You've already taxed it somewhere else

2. Are you UK-domiciled or non-domiciled? If you're not domiciled here, you may be eligible to claim the remittance basis, which is: You pay tax on foreign income only if you bring it into the UK

You'll need to claim this on your Self Assessment tax return

Sometimes there is a remittance charge if you've been in the UK for many years

What If You've Already Paid Tax Abroad?

Hooray! The UK has Double Taxation Agreements (DTAs) with most countries.

This is so that if you've already taxed your foreign income, you may be relieved or credited so that you're not taxed again. You'll only need to:

• Maintain clear records of foreign taxes paid
• Report it all accurately to HMRC
• Potentially send foreign tax certificates or returns

Common Mistakes to Avoid

• Not reporting foreign income you "didn't bring into the UK" (HMRC still wants to know about it)
• Overlooking reporting of small interest/dividends on foreign banks
• Assuming you don't have to file a return
• Forgoing tax relief because of poor records

Foreign income tax isn't intimidating — but it does require to be done correctly.

The trick is knowing your residency status, having good records, and seeking professional guidance when it gets complex.

Need Assistance With Foreign Income Tax?

At TAXVAT, we assist individuals and business owners to remain compliant, optimise reliefs, and retain more of their cash — wherever in the world they earn it.

• Foreign property, income or dividend tax
• Overseas tax paid relief claim
• Submitting your Self Assessment accurately and within time

Contact us today for a free consultation