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Personal Allowances for UK Non-residents and Dual Residents

Published by Susan Basnet
Posted Date: July 4, 2024 , Modified Date: July 3, 2024
Categories: Personal Allowance

Most people in the UK receive a personal allowance of tax-free income, which is currently set at £12,570. Individuals who qualify for this allowance do not have to pay tax on their income if it remains below this threshold. The personal allowance can be higher if additional allowances, such as the marriage allowance or blind person’s allowance, are claimed. 

A person is considered a dual resident if they are resident in the UK under its domestic law and resident in another country under its law, thus being subject to taxation in both countries. In contrast, UK non-residents only pay tax on their UK income. But do the individuals in these two categories qualify for the personal allowance in the UK? Let's explore this question further.  

Who Can Claim the Personal Allowance? 

Individuals can claim the personal allowance each year if they meet the following criteria: 

  • They are a British citizen, 
  • They are a citizen of a European Economic Area (EEA) country, or 
  • They worked for the UK government at any time during that tax year. 

Additionally, a taxpayer may be eligible for the personal allowance if it is specified in the double-taxation agreement between the UK and their country of residence. 

Claiming the Personal Allowance as a Non-resident - Conditions 

Personal allowances eligibility criteria

In certain specific circumstances, Non-residents and dual residents are also eligible to claim personal allowance in the UK. The eligibility criteria include: 

Conditions

Countries

National of

Israel or Jamaica

EEA National of

Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Irish Republic, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal inc. Madeira & The Azores, Romania, Slovakia, Slovenia, Spain, Sweden, or United Kingdom 

National and resident of

Argentina, Australia, Azerbaijan, Bangladesh, Belarus, Bolivia, Bosnia and Herzegovina, Botswana, Canada, Côte d’Ivoire (Ivory Coast), Egypt, Gambia, India, Indonesia, Japan, Jordan, Kazakhstan, Korea, Lesotho, Malaysia, Montenegro, Morocco, New Zealand, Nigeria, Oman, Pakistan, Papua New Guinea, Philippines, Russian Federation, Serbia, South Africa, Sri Lanka, Sudan, Switzerland, Taiwan, Tajikistan, Thailand, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, Uzbekistan, Venezuela, Vietnam, Federal Republic of Yugoslavia, or Zimbabwe 

Resident of

Austria, Barbados, Belgium, Fiji, France, Germany, Greece, Ireland, Kenya, Luxembourg, Mauritius, Myanmar (Burma), Namibia, Netherlands, Portugal, Swaziland, Sweden, Switzerland, or Zambia 

Exception: 

Individuals whose UK income consists solely of dividends, interest, and royalties may not be entitled to personal allowances if: 

  • They are residents of Kenya, Mauritius, or Zambia, or 
  • They are residents but not citizens of Austria, Belgium, Germany, Luxembourg, Portugal, Sweden, or Switzerland

How to Claim Personal Allowance as a UK Non-Resident? 

Non-UK Residents must claim the Personal Allowance at the end of each tax year by sending form R43 to HMRC. This form allows them to claim back tax and personal allowances on any UK income received in the current tax year or in the last 4 tax years.  

However, individuals earning over £2,500 in rental income from a UK property must file a self-assessment tax return instead of using form R43. 

Practical Tips

For dual residents or non-residents who believe they might be eligible for the UK personal allowance, the following steps are recommended: 

  • Check your residency status: The first thing to do is to confirm your residency status in the UK for tax purposes. Your residency status can be determined by the Statutory Residence Test (SRT) on our website. 
  • Check Eligibility: Once you have confirmed your tax residency status, you need to check If your home country has a tax treaty with the UK that includes provisions for personal allowances.
  • Seek Professional Advice: Consult with a tax adviser who specialises in international tax issues to understand your specific situation and how to maximise your tax benefits.

Conclusion 

Understanding the eligibility criteria and claiming process for personal allowances can help non-residents and dual residents minimise their tax liability in the UK. By confirming residency status, checking treaty provisions, and seeking professional advice, individuals can ensure they make the most of available tax benefits. For tailored advice and assistance, consulting with a tax professional is highly recommended. 

Need expert advice on Personal Allowance?

Contact us today for efficient and hassle-free assistance.

Susan Basnet
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