We explain tax on foreign income in plain English, handle it correctly, and make sure you claim every relief you are entitled to, all at a fixed fee.
Tax on Foreign Income
If you are UK resident, you are generally taxable on your worldwide income, foreign employment, pensions, rental, interest and dividends, but double taxation relief stops you being taxed twice, and how it all interacts is where mistakes happen.
We report your foreign income correctly, claim double taxation relief for tax paid abroad, apply the right treaty treatment, and make sure you neither overpay nor fall foul of HMRC's growing information on offshore income.
HMRC now receives extensive data on offshore income and accounts, so undeclared foreign income is increasingly detected. Reporting it correctly, and claiming relief for foreign tax, is essential to stay compliant and avoid double taxation.
The Detail That Matters
Foreign income is one of the areas HMRC gets most wrong on people, and where people most often get it wrong themselves, because five or six different rules interact at once. Here is what actually determines your bill, in the order it matters.
If you are UK tax resident, you are taxed on your worldwide income on the arising basis, the income is taxable here in the year it arises, whether or not you bring it into the UK. Residence is set by the Statutory Residence Test, which looks at days spent in the UK and your connecting ties (family, accommodation, work, and time here in earlier years). Non-residents are generally taxed only on UK-source income. Getting your residence position right is the first thing we establish, because it changes what the UK can tax at all.
The old non-domicile remittance basis was abolished on 6 April 2025 and replaced by the Foreign Income and Gains (FIG) regime. If you are in your first four years of UK residence and were non-resident for the previous ten, you can claim 100% relief on your foreign income and gains for those four years. After that window, or if you do not qualify, you are taxed on the arising basis like any other resident. If you arrived recently, this is often the single biggest planning point, and it must be claimed, it is not automatic.
Foreign employment is taxed as earnings, with relief where duties are performed abroad and, for some, Overseas Workday Relief. Foreign rental is recomputed under UK property rules, so the mortgage-interest restriction (a 20% credit, not a deduction) applies, and foreign property losses are pooled separately from UK ones. Foreign pensions are now taxable in full (the old 10% deduction was withdrawn). Foreign interest and dividends use your Personal Savings Allowance and £500 dividend allowance, with dividends taxed at 8.75%, 33.75% or 39.35% depending on your band. Lumping it all together as "foreign income" is exactly how reliefs get missed.
Where the same income is taxed abroad, Foreign Tax Credit Relief credits that foreign tax against your UK tax, but only up to the lower of the foreign tax paid and the UK tax on that same income. If the foreign country taxed you at more than the treaty allows, the excess is not creditable, you have to reclaim it from that country instead. That is why we check the relevant double taxation treaty and the correct treaty rate first: on US dividends, for example, filing a W-8BEN caps withholding at 15% rather than 30%, and only the 15% is creditable here.
Foreign income goes on the SA106 foreign pages of your Self Assessment, converted to sterling using HMRC's published exchange rates. This matters more than ever because, under the Common Reporting Standard, HMRC now receives account and income data automatically from over 100 countries. Offshore non-compliance carries some of the harshest penalties in the system, up to 200% of the tax, so undeclared foreign income is a growing risk. Where earlier years need putting right, the Worldwide Disclosure Facility is usually the safest route, and we handle that disclosure for you on the best available terms.
The commonest, and costliest, mistake we see is people either not declaring foreign income at all (assuming "it was already taxed over there"), or declaring it but never claiming Foreign Tax Credit Relief, so they genuinely pay twice. Both are avoidable.
Key Figures
How We Help
We report your foreign employment, pension, rental, interest and dividend income in the UK correctly, converted to sterling.
We claim credit for tax paid abroad against your UK tax, so the same income is not taxed twice.
With HMRC receiving offshore data, we make sure your foreign income is properly declared, protecting you from penalties for undeclared income.
All the forms, calculations and correspondence handled on your behalf, so you never have to decode HMRC's rules or sit on hold.
A clear fixed fee quoted after a free call, your position explained in plain English, and never a surprise bill.
We act quickly, and where earlier years are involved we put those right too, reclaiming refunds or minimising penalties.
Foreign income is a growing area of HMRC scrutiny thanks to international data sharing, and double taxation relief is easy to miss. We report it correctly and claim the relief so you are compliant and not taxed twice.
Recent Client Outcome
One client, a UK-resident IT consultant, came to us after a letter from HMRC prompted by overseas data. She held a rental flat in Portugal and a portfolio of US shares, and had assumed that because both were "already taxed abroad", there was nothing to report here. She was wrong on the reporting, but also owed less than she feared once the reliefs were claimed properly.
What we found. Her Portuguese flat produced £14,400 of rent, with £3,900 of allowable running costs and £4,200 of mortgage interest; she had paid £1,750 of Portuguese tax on it. Her US shares paid £6,200 of dividends, from which 30% (£1,860) had been withheld because she had never filed a W-8BEN, when the UK/US treaty rate is 15%.
What we did. We recomputed the Portuguese rental under UK rules, £14,400 less £3,900 gives £10,500 of profit, with the mortgage interest relieved as a 20% credit rather than a deduction, then credited the £1,750 of Portuguese tax against the UK tax on that profit through Foreign Tax Credit Relief. On the dividends, we applied her £500 allowance, claimed credit for the treaty-rate 15%, and filed a W-8BEN so future withholding drops from 30% to 15%, and helped her reclaim the over-withheld US tax from the IRS.
The outcome. Her foreign income was taxed once, not twice; the double taxation relief wiped out most of the UK liability on the rental; and we corrected the two earlier years through the Worldwide Disclosure Facility before HMRC escalated, which capped the penalty at the lowest band rather than the offshore rates of up to 200%. Net of our fixed fee, she was several thousand pounds better off and, more importantly, fully compliant with no open enquiry.
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