United Kingdom Tax Guide

The Statutory Residence Test

UK residency for a tax year is decided by the Statutory Residence Test (SRT), applied in three stages:

• Automatic overseas tests. Fewer than 16 days in the UK (or fewer than 46 for people not UK resident in the previous three years), or full-time work abroad with limited UK days, generally means non-resident.
• Automatic UK tests. 183 days or more in the UK, an only home in the UK, or full-time work in the UK generally means resident.
• Sufficient ties test. Otherwise, residency depends on the number of UK ties (family, accommodation, work, 90-day, and country ties) measured against day-count bands; more ties mean fewer days are needed to become resident.

Split-year treatment can divide a tax year into resident and non-resident parts in defined arrival and departure cases, which matters enormously in the year of a move.

Who Has to File

Most employees are taxed in full through PAYE withholding and never file a return. A Self Assessment return is generally required for the self-employed, company directors with untaxed income, landlords, people with foreign income or gains, and anyone HMRC asks to file. Since the 2024/25 tax year, a high salary alone no longer forces PAYE-only employees to file: the old 150,000 pound income threshold was removed.

Income Tax Rates (2025/26)

For England, Wales, and Northern Ireland, income above the personal allowance of 12,570 pounds is taxed as follows:

The personal allowance is withdrawn at 1 pound for every 2 pounds of income above 100,000 pounds, creating an effective 60% band between 100,000 and 125,140 pounds. Scotland sets its own bands and rates for earned income, with a top rate of 48%.

Dividends and savings

Dividends above a 500 pound allowance are taxed at 8.75%, 33.75%, and 39.35% depending on the band. Savings interest can be covered by the personal savings allowance (up to 1,000 pounds for basic-rate taxpayers) and a starting rate in low-income cases.

Key Deadlines

The FIG Regime (Foreign Income and Gains)

From April 6, 2025, the remittance basis for non-doms was abolished. In its place, people who become UK resident after at least 10 consecutive years of non-residence can claim 100% relief on foreign income and gains for their first four years of UK residence, even if the money is brought into the UK.

After the four years, worldwide income and gains are taxed as they arise. Transitional rules, including a temporary repatriation facility for pre-2025 foreign income, apply to people who previously used the remittance basis, and inheritance tax also moved to a residence-based system.

National Insurance

Employees generally pay Class 1 National Insurance at 8% on earnings between roughly 12,570 and 50,270 pounds and 2% above that; employers pay separately at 15%. The self-employed generally pay Class 4 at 6% and 2% on profits.

International moves raise their own questions: social security agreements and EU coordination rules can keep someone in one country's system during a posting, an analysis separate from income tax residency.

Capital Gains Tax

Above an annual exempt amount of 3,000 pounds, gains are generally taxed at 18% within the basic-rate band and 24% above it, including for residential property. A main home is generally exempt through private residence relief.

Non-residents are generally within UK capital gains tax on UK land and property and must file a property return within 60 days of completion on residential sales. Temporary non-residence rules can tax gains made during short periods abroad once someone returns.

Tax Treaties

The UK has one of the largest treaty networks in the world, with over 130 double tax treaties in force. Treaties generally determine which country may tax employment income, pensions, dividends, and gains, and they include tie-breaker rules for dual residents.

Treaty tie-breakers

When a person qualifies as a tax resident of both the UK and another country, the treaty tie-breaker typically checks: permanent home, center of vital interests, habitual abode, and nationality, in that order.

Leaving the UK

Departures usually involve form P85 or a final Self Assessment return, a split-year analysis, and attention to the temporary non-residence rules if a return within five years is possible. UK-source income such as rental income generally stays taxable in the UK after departure.

Frequently Asked Questions

How many days can I spend in the UK without becoming resident?

It depends on your ties. Under the SRT, someone with no recent UK residence and few ties may stay non-resident up to 182 days, while someone with several ties (home, family, work, past presence) can become resident with as few as 16 to 45 days. The bands make day planning very fact-specific, a good topic for a professional.

Do I need to file a UK return if I am on PAYE?

Usually not: PAYE settles most employees' tax in full, and since the 2024/25 tax year a high salary alone no longer triggers a return (the old 150,000 pound threshold was removed). A return is generally needed with self-employment, rental or foreign income, untaxed investment income, or when HMRC issues a notice to file.

What replaced the non-dom regime?

From April 2025, a residence-based FIG regime: new arrivals after 10 years of non-residence can claim full relief on foreign income and gains for their first four years of UK residence. After that, worldwide income and gains are taxed as they arise.

When is the next Self Assessment deadline?

Online returns and payment for the 2025/26 tax year are due by January 31, 2027 (paper returns by October 31, 2026). The online deadline for the 2024/25 year was January 31, 2026.