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Self-Assessment Tax Return for Expats Living Overseas

Published by Susan Basnet,
Posted Date: January 19, 2024 , Modified Date: May 29, 2024

Embarking on the expatriate journey is a transformative experience, but it comes with the responsibility of managing your financial ties to the UK.

By understanding the complexities of UK taxation for expatriates and taking proactive steps, you can ensure that your global adventures are complemented by sound financial planning.

Whether you’re already living overseas or just packing your bags, this guide is your key to understanding your financial landscape.

In this comprehensive guide, we discuss the details of tax obligations, exemptions, and reporting requirements for UK residents living overseas.

Check Your Residency Status

A UK resident is taxable on his worldwide income whereas UK source income is taxable for non-residents. Hence, it is crucial to determine the residency status of the expats living overseas.

If you are unsure of your residency status, check out our article "How Can Someone be Treated as a UK Resident for Tax Status?" to avoid any unnecessary hassle.

UK Income Tax & Personal Allowance

Your income is subject to UK taxation even if you are not a resident. The following income will form a part of the UK tax.

  • Pensions
  • Rental Properties
  • Savings Interest
  • Wages

You might be eligible for tax free personal allowance of Β£12,570 if you are a British citizen or a citizen of the European Economic Area (EEA) country or have worked for the UK government at any point during the tax year.

Furthermore, you may potentially qualify if the personal allowance is included in a double-taxation agreement between the UK and your country of residence.

It should be noted that you will not get the personal allowance if the income exceeds Β£125,140.

Double-Taxation Agreements

Double-taxation agreements are crucial mechanisms that offer relief to expatriates, preventing them from facing taxation on the same income in both their resident country and the United Kingdom.

These agreements serve to streamline tax obligations and avoid duplicative taxation for individuals living and earning income across international borders.

self assessment tax returns

If you are a resident in a country with no double-taxation agreement with the UK, you may still be able to claim credit by filling in the supplementary foreign pages SA106 on your tax return.

It should be noted that the double taxation agreements do not apply to tax on gains from selling UK residential property.

Income Requiring Reporting

You are required to submit a Self-Assessment Tax Return if you engage in activities such as renting out property or working for yourself in the UK.

Additionally, if you have a pension located outside the UK and were a UK resident in any of the previous five tax years, or if you possess other untaxed income, the submission of a Self-Assessment becomes a requisite.

Filing Procedures

If you are a non-resident, HMRC's online services for reporting income are unavailable to you. Instead, you must choose one of the following options:

  • Manually complete a Self-Assessment tax return along with an SA109 form and send it via post
  • Utilise commercial Self-Assessment software that accommodates SA109 reporting
  • Seek the assistance of a tax professional to handle the reporting of your UK income on your behalf

These alternatives ensure compliance with reporting requirements tailored to the unique circumstances of non-resident taxpayers.

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The Challenge of Rental Income

As a non-resident landlord renting out the property in the UK, you are required to pay tax on your rental income and on the capital gain if you sell the property.

You have the option to receive full amount of your rental income, or you can have the tax already subtracted by your letting agent or tenant. If you opt to receive the reduced rent, your property manager or tenant will:

  • Deduct basic rate tax, i.e., 20% from your rent and;
  • Give you a certificate at the end of the tax year showing how much they’ve deducted.

If you do not have a letting agent and your tenant pays you more than Β£100 a week in rent, they will deduct the tax from their rent payments to you.

To get the full amount of your rental income without any deduction, you need to apply for Non-Resident Landlord Scheme. Under this scheme, you will fill and submit the NRL1 form to HMRC.

HMRC will allow you to receive the full amount of rental income. However, you must pay the tax on rental income at the time of filing the Self-Assessment Tax Return.

Penalties for Late Filing

Timely filing of the Self-Assessment Tax Return is crucial. The filing should be done by 31 October if made on paper or by 31 January if made through an online method.

The penalties levied on you will be different based on how late you file your tax returns:

  • One day late – Initial late filing penalty of Β£100. You will be charged this amount even if you have already cleared your tax dues.
  • Three months late – An automatic daily penalty of Β£10 per day, up to a maximum of Β£900.
  • Six months late– Imposition of further penalties, which is greater of 5% of tax due or Β£300.

In severe instances, you could be subjected to a higher penalty that amounts to as much as 100% of the due tax.

Penalties for Late Payment

It is crucial not only to file the Self-Assessment Tax Return but also to pay the dues pertaining to Self-Assessment. The below table provides you the penalties applicable for late payment of taxes.

Period of Delay


30 days

5% of unpaid tax

6 months

5% of unpaid tax (additional)

12 months

5% of unpaid tax (additional)


UK taxation as an expatriate involves understanding residency rules, utilising double-taxation agreements, and reporting income sources like rental income. Compliance with filing procedures, timely submissions, and avoiding penalties are crucial as well.

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Susan Basnet
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