Introductory guide to UK tax for non-resident individuals
Introductory guide to UK tax for non-resident individuals

The following Private Client guidance note provides comprehensive and up to date legal information covering:

  • Introductory guide to UK tax for non-resident individuals
  • Income tax and the territoriality principle
  • Capital gains tax
  • Inheritance tax
  • Value added tax
  • National insurance contributions
  • Annual tax on enveloped dwellings
  • Stamp duty land tax

This Practice Note briefly summarises the main UK taxes which may apply to non-UK resident individuals, including income tax, capital gains tax (CGT), inheritance tax (IHT), value added tax (VAT), national insurance contributions (NICs), the annual tax on enveloped dwellings (ATED) and stamp duty land tax (SDLT). Broadly, UK tax legislation is subject to territorial limits, so that either what is taxed must have a UK source, or the person who is taxed, is resident in the UK.

In contrast to many other jurisdictions, the UK tax year is not a calendar year, but runs from 6 April to 5 April.

Income tax and the territoriality principle

UK income tax legislation has long recognised the territoriality principle.

Key income tax exceptions and qualifications to the territoriality principle

The most important exceptions and qualifications are:

  1. The relevant foreign income and certain earnings of remittance basis users are not taxed except insofar as remitted (see Practice Note: UK resident non-domiciliaries—application of the remittance basis to foreign income and gains)

  2. Where there is a double tax agreement, it may provide for certain foreign income and gains to be wholly exempt from UK tax. If not, UK tax is charged, but a claim may be made for a credit to be given against the UK tax for the lower of the overseas tax liability and the