If you are relocating to the UK there will be tax implications for you to consider, especially if you continue to have income and gains coming into the UK from overseas. 

Should you be taxed using the remittance basis or the arising basis? What about investments, Capital Gains Tax, or tax reliefs?

There are some key issues to consider which include (not exclusively) the following:

Split-Year Treatment

In the UK we have 'split-year treatment' which looks at when you should start to be taxed as a UK tax resident if you arrive in the UK during a tax year. How this is calculated depends on the timing of your relocation. You may have a year with a UK part and an overseas part or you may be considered a UK tax resident from the start of the tax year of arrival or the following year.

The Remittance Basis

The remittance basis is an alternative tax treatment that’s available to individuals who are resident but not domiciled in the UK and have foreign income and gains. It is worth considering whether this is the best approach to take for non-domiciled individuals as a result of the loss of personal allowances and annual exemptions in your early years of UK tax residence and if this approach is taken it is important to structure your bank accounts appropriately for this.  It is worth noting that the remittance basis is being abolished from 5 April 2025 and being replaced by a foreign income and gains scheme for new arrivals to the UK, details of which are still to be finalised.

The Arising Basis

Under the arising basis, the foreign income of a UK tax resident is taxed in the year in which it arises overseas. Certain investments, such as funds, can lead to a less favourable tax treatment in the UK therefore may be advantageous to look at how your investments are structured. 

Investments and Tax Relief

As a UK tax resident you will be able to pay National Insurance and pension contributions, and have access to tax reliefs including ISA contributions and Gift-Aid relief.

UK Relocation Briefings

At LSR Partners, we offer relocation briefings that give all the information you would need to successfully relocate as a UK tax resident. 

Please visit the website and let us know how we can help!

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