What UK Residents With Overseas Income Need to Know
10 Oct. 2025 – written by Steffen Kemmerzehl – Friendly Assist Accountancy – Blog
If you live in the UK and have income, savings, property, or investments abroad, there have been significant changes to how this is taxed.
From 6 April 2025, the UK moved away from the long-standing non-domicile tax rules and introduced a new residence-based system. This means many people who previously had more flexibility in how their overseas income was taxed may now need to report and pay UK tax on worldwide income and gains.
These changes reflect HMRC’s updated rules on how UK residents with foreign income are taxed.
At Friendly Assist Accountancy, we are already supporting clients through this transition and helping them understand what it means for their personal situation.
What has changed?
The previous “non-dom” system allowed some UK residents to use the remittance basis, meaning foreign income was only taxed if it was brought into the UK.
This system has now largely ended for most taxpayers.
Under the new rules:
• UK tax residents are generally taxed on worldwide income and gains
• the remittance basis no longer applies in most cases
• some recent arrivals may qualify for a time-limited relief period
• offshore structures such as trusts and overseas companies may now fall within UK tax scope
These changes are already in effect for the 2025–26 tax year.
But the new rules can also create opportunities
The end of the remittance basis does not automatically mean that everyone with overseas income will pay more UK tax.
If you have recently moved to the UK after being non-UK resident for at least 10 consecutive tax years, you may qualify for the new four-year Foreign Income and Gains (FIG) regime. This can provide relief from UK tax on eligible foreign income and gains during your first four years of UK residence.
There is also an important temporary opportunity for some people who previously used the remittance basis and still have historic foreign income or gains overseas.
The Temporary Repatriation Facility (TRF) can allow qualifying pre-April 2025 foreign income and gains to be designated at a reduced tax rate. For 2026/27 the rate is 12%, before increasing to 15% for 2027/28.
These rules are very dependent on individual circumstances, so this is an area where checking your position before moving money or making a claim can be worthwhile.
Who is affected?
These changes may apply if you have:
• overseas rental income
• foreign investments or dividends
• interest from overseas savings accounts
• offshore business interests or trusts
• property or assets held outside the UK
Even if the money is not transferred to the UK, it may still need to be reported.
Why this matters now
We are currently in a transition period where many people are preparing their first tax returns under the new system.
This makes accurate reporting especially important, as HMRC will expect clearer disclosure of overseas income than under the previous regime.
Why 2026/27 is particularly important
We are now approaching the first Self Assessment filing season covering a full tax year under the new foreign income and gains rules.
For the 2025/26 tax year, online Self Assessment returns are due by 31 January 2027.
If you have overseas income, investments, property or gains, this is a good time to check what needs reporting rather than discovering the issue when the filing deadline is close.
This is particularly important if you moved to the UK relatively recently, previously used the remittance basis, or have foreign income that has simply remained in an overseas account.
What you can do now
Even though the changes are already in place, there is still time to prepare and make your tax position clearer.
This may include:
• reviewing how your overseas income is structured
• checking what needs to be reported in the UK
• making sure records are complete and consistent
• understanding whether any reliefs still apply
• planning ahead for future tax years under the new system
A simple example
If you own a rental property overseas, you may now need to declare that income in your UK tax return, even if you keep the rental profits in a foreign bank account and do not bring them into the UK.
This is one of the key differences under the new system.
How Friendly Assist Accountancy can help
We support clients with international income and cross-border tax issues by helping them:
• understand how the new rules apply to their situation
• prepare accurate UK tax returns
• review overseas income and investments
• stay compliant with HMRC reporting requirements
• plan ahead to reduce unnecessary tax exposure where possible
If you are unsure how the changes affect you, it is worth getting advice early, especially before filing deadlines approach.
Why professional advice matters
These are some of the most significant changes to UK tax rules for international income in many years.
For many people, the rules are not difficult in principle, but they are detailed and easy to misunderstand in practice.
Getting clarity early can help avoid mistakes, stress, and unexpected tax bills.
If you would like support, Friendly Assist Accountancy is here to help you understand your position and move forward with confidence.
Contact us to discuss how the new rules affect you and how we can help you optimize your tax position.
Steffen Kemmerzehl
I am a qualified AAT accountant in Newcastle upon Tyne.
Please get in touch if you’re interested in arranging an appointment.
Useful sources and further reading
HM Revenue & Customs, 4-year Foreign Income and Gains regime
https://www.gov.uk/guidance/check-if-you-can-claim-the-4-year-foreign-income-and-gains-regime
Low Incomes Tax Reform Group, Foreign Income and Gains regime
https://www.litrg.org.uk/international/uk-tax-uk-residents-foreign-income-and-gains/foreign-income-and-gains-regime-tax-years-202526
HM Revenue & Customs, Temporary Repatriation Facility
https://www.gov.uk/government/publications/remittance-basis-hs264-self-assessment-helpsheet/hs264-remittance-of-pre-6-april-2025-foreign-income-and-gains-and-the-temporary-repatriation-facility-trf
Information checked September 2026. International tax depends heavily on individual residence and circumstances, and tax rules can change.