International matters: introduction
If your personal circumstances have some foreign aspect to them (for example, if you have lived overseas), or if you have foreign income or gains, your tax affairs can be more complicated. We cover the UK rules, but you may also need to consider the rules in other relevant countries as well as international tax agreements. As this is a complex area, you may also need professional advice.
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Generally, each country will have their own rules which set out who is liable to tax in that country and on what.
Very broadly and at their simplest, the UK’s rules will tax:
- people living in the UK on their worldwide income and gains, and
- everyone in the world on sources of income (and, in some cases, gains) arising in the UK.
There are very important exceptions to the first bullet point for people who live in the UK but are non-domiciled. Being non-domiciled broadly means that your long-term, permanent ‘home’ is overseas. For non-domiciled individuals, foreign income and gains might not be taxable in the UK.
You might come to live in the UK, or stop living in the UK, or you might live your life across more than one country (including the UK). International students are an important example. To work how this affects your UK tax position, including when or whether you are liable to tax in the UK on your worldwide income and gains, the starting point is to work out your tax residence status.
Even if you have always lived in the UK and don’t intend to leave, you might still have income or gains overseas. These would usually be taxable in the UK, but that can give rise to complexities because the other country may also want to tax the income or gain. When this happens, there are specific rules which provide relief for that double taxation.
If you work temporarily or permanently for an employer based in a different country from where you physically work, you will need to consider the tax consequences in both countries.
For non-UK resident individuals, UK tax on some UK income sources is restricted under the ‘disregarded income’ rules. You can read more about these rules on our page UK tax for non-UK residents on UK income and gains.
If you work internationally, then as well as understanding where you owe tax then you will also need to consider separately where you owe social security – known as National Insurance contributions (NIC) in the UK. There are different rules depending on the type of work (for example, employed or self-employed), the circumstances surrounding the cross-border working (for example, the expected duration or the work pattern) and the countries involved.
Individuals who have paid NIC in the UK should also understand how their cross-border work affects their entitlement to a UK state pension.
Student loan repayments
If you are liable to student loan repayments and you leave the UK, see our page UK student loan repayments when going overseas.