Tips for UK, EU and others
11 Oct. 2025 – written by Steffen Kemmerzehl – Friendly Assist Accountancy – Blog
If you’ve recently moved to the UK or are planning to it’s essential to understand how your income, savings, and investments will now be taxed. The UK government abolished the long-standing non-domiciled (non-dom) tax regime and replaced it with a residence-based tax system.
These reforms mean that most UK residents are now taxed on their worldwide income and gains, not just what they earn in the UK. At Friendly Assist Accountancy, we help international professionals, returning expats, and EU citizens navigate these changes confidently and plan efficiently for life in the UK. We show how to achieve tax savings.
The End of Non-Dom Status
Before April 2025, non-domiciled residents could use the “remittance basis,” meaning foreign income was only taxed if brought into the UK. This option has now been removed.
The UK’s new rules apply based on residency, not domicile. If you are classed as a UK tax resident, you must now pay tax on all global income and capital gains, even if they remain offshore.
The government’s aim is fairness, taxing everyone by residence, but the impact on international residents and investors has been substantial.
Four-Year Foreign Income and Gains Regime for New Arrivals
If you become UK resident after a period of at least 10 consecutive tax years of non-UK residence, you may qualify for the new four-year Foreign Income and Gains (FIG) regime.
During the qualifying period, eligible foreign income and gains can be relieved from UK tax if the appropriate claim is made. Unlike the old remittance basis, qualifying FIG can generally be brought to the UK without losing the relief.
This can create valuable planning opportunities for people moving to the UK, but eligibility, residence history and the type of foreign income or gains involved all matter. It is therefore worth checking your position early, particularly if you have overseas investments, property or substantial foreign income.
Overseas Workday Relief (OWR)
For employees who move to the UK but continue working partly overseas, Overseas Workday Relief can be particularly valuable.
Under the rules applying from April 2025, qualifying new residents may be able to claim relief on employment income relating to duties performed outside the UK during their first four years of UK residence.
Unlike the old rules, the relevant income does not generally need to be paid into or kept in an overseas bank account. There is, however, a limit on the amount of relief that can be claimed, and eligibility depends on your residence history and circumstances.
Good records still matter. Keep details of where you worked, travel dates, employment contracts and payslips so that any claim can be properly supported.
Friendly Assist Accountancy can help establish whether OWR applies and calculate the appropriate claim.
Friendly Assist Accountancy helps clients maintain these records and apply OWR correctly to avoid HMRC challenges.
Day Counting and the Statutory Residence Test
The Statutory Residence Test (SRT) determines your UK tax residency each year. It looks at the number of days you spend in the UK and your “ties”. Such as work, family, or accommodation.
Accurate day counting and record-keeping are critical. Even short visits can affect your tax status. Many expats also qualify for split-year treatment, which divides a tax year between non-residency and residency when moving partway through.
Allowances, Tax Rates, and Treaties
For 2025/26, the standard Personal Allowance is £12,570, although it is not available in all circumstances. In particular, claiming relief under the FIG regime can result in the loss of the Personal Allowance and Capital Gains Tax annual exempt amount, so whether a FIG claim is beneficial should be considered as part of your overall tax position.
Income tax rates remain:
- 20% basic rate
- 40% higher rate
- 45% additional rate
The UK also maintains double taxation treaties with most EU countries and others, ensuring income is not taxed twice. Friendly Assist Accountancy can review your circumstances to ensure treaty benefits are applied correctly.
The Year You Arrive Can Be Particularly Important
Moving to the UK halfway through a tax year does not necessarily mean that all of your income for that year suddenly becomes subject to UK tax.
Depending on your circumstances, split-year treatment may divide the year into an overseas part and a UK part. The rules are detailed and depend on factors such as when you establish a UK home, start working here and your previous residence position.
This is why dates matter when moving internationally. Keep a record of when you arrived, where you lived, when UK employment started and the days you spent back overseas.
It is also worth looking at your overseas income and assets before assuming that something is taxable twice. Double taxation agreements and foreign tax credit relief can sometimes change the final UK position.
If you have recently arrived and are unsure where your UK tax obligations actually begin, this is something we can look at with you.
Reporting and Compliance
Under the new system, most UK residents must report worldwide income on their tax returns, including:
- Foreign salary, dividends, and interest
- Rental income from overseas property
- Capital gains on foreign assets
Accurate reporting and professional review can help prevent penalties and ensure you make full use of available reliefs.
How Friendly Assist Accountancy Can Help
Our international tax specialists assist EU citizens, expats, and returning UK residents with:
- Residency status assessments and tax planning
- Claiming four-year foreign income exemptions and OWR
- Managing double taxation and treaty claims
- Filing UK self-assessment returns accurately
- Planning for potential exit tax implications
We provide clear, practical advice tailored to your personal situation ensuring you stay compliant, efficient, and confident under the UK’s new tax rules.
In Summary
The abolition of non-dom status and the shift to residence-based taxation represent one of the biggest overhauls in decades. For new arrivals and long-term expats alike, careful planning and early advice can make all the difference.
Get in touch with Friendly Assist Accountancy today for expert guidance on UK tax for EU citizens, expats, and globally mobile professionals.
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, Tax on foreign income: UK residence and tax
https://www.gov.uk/tax-foreign-income/residence
HM Revenue & Customs, Statutory Residence Test guidance
https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt
Low Incomes Tax Reform Group, International tax guidance
https://www.litrg.org.uk/international
Information checked September 2026. International tax depends on individual circumstances, residence history and applicable tax treaties, and tax rules can change.