This guide explains how UK tax residence works in 2026/27, what can still be taxable in the UK when you live abroad, and the planning points to consider before you leave, while you are overseas, or before you return.
Understanding your residency is vital for determining the scope of your UK tax liability. Your UK tax residence status is determined by the Statutory Residence Test (SRT). Broadly, this depends on the number of days you spend in the UK, where you work, and the connections (“ties”) you retain here. As such, it is vital you keep a detailed record of your day count. In some cases, split year treatment can apply. Instead of the default position where a tax year is treated as wholly UK resident or non-resident, the year is split into a UK part and an overseas part.
Even if you are classified as non-resident, some UK taxes may still apply. These include any capital gains on the basis of disposal of UK property or land, rental profits from UK properties and UK employment income, however this often only applies if you are physically located in the UK whilst performing this work.
New and Returning UK Residence – The FIG Regime
The FIG regime (foreign income and gains regime) replaces the old domicile-based system. The new FIG regime allows qualifying new residents to claim relief on eligible foreign income and gains arising in the first four years of residency. It is important to note that, by claiming FIG relief, many of the UK tax allowances are lost, meaning claiming this relief is not always the best option. Additionally, no relief can be carried forward if unclaimed in one of the four years.
Leaving the UK temporarily
It is important to note that someone is only eligible for FIG relief if they are a new UK resident. This is defined as having 10 consecutive tax years of non-UK residence prior to becoming resident.
Additionally, you could be trapped by the temporary non-residence rules, where, if you leave and come back to the UK, certain income and gains realised as a non-resident can be taxed when you become a UK tax resident again. The key period to avoid this usually 5 complete tax years of non-residence.
It is important, before both moving abroad or returning to the UK, to consider how your income and gains will interact with the UK tax system. We’ve put together a Spotlight Report summarising the guidance for determining if UK tax residency applies, and how this may affect your tax liability. Follow this link to access the report: Working-abroad-getting-your-uk-tax-residence-right-June-26.pdf
Your questions answered
If I move abroad, does that automatically make me non-UK resident?
No. Residence depends on the Statutory Residence Test. Many people can fail this on the basis of UK workdays, breaks or keeping too many UK connections. It’s also important to note that, in the majority, your residence for the tax year is treated as a whole.
Can I keep my UK house if I work abroad?
Possibly, but this could be risky for the Statutory Residence Test. A UK home that remains available and is used during visits can trigger UK residence under the automatic tests or create an accommodation tie. The facts and usage matter.
If I become non-resident, do I stop paying UK tax?
No. UK tax can still be payable on UK-based income, such as from rental properties and work performed in the UK. Additionally, gains made from UK-based disposals and investments can also be charged.
