UK Returning From Abroad (2026/27)

Q How is UK tax residency determined when I return?

By the Statutory Residence Test in Finance Act 2013 Schedule 45, applied tax year by tax year (HMRC RDR3). (1) Automatic overseas tests: you are not UK resident if you spend fewer than 16 days in the UK and were UK resident in one or more of the previous 3 tax years, or fewer than 46 days and were resident in none of them (there is a third test for full-time work abroad). (2) Automatic UK tests: you are UK resident if you spend 183 days or more in the UK; or you have a UK home for a period of at least 91 consecutive days, at least 30 of which fall in the tax year, you are present in it on at least 30 days, and you have no overseas home or spend fewer than 30 days in it; or you work full-time in the UK over a 365-day period. (3) Sufficient ties test: if no automatic test decides it, count your UK ties against your UK days. For someone who was not UK resident in any of the previous 3 tax years the ties are family, accommodation, work and 90-day ties; the country tie applies only if you were UK resident in one or more of those years. If you arrive part-way through a year, check split-year Cases 4 to 8.

Q What's the FIG regime from April 2025?

The 4-year foreign income and gains (FIG) regime replaced the remittance basis on 6 April 2025. You can claim it in your first 4 tax years of UK residence if you were not UK resident for at least the 10 consecutive tax years before. Claimed income and gains are not taxed in the UK, and you choose which sources to claim for. It covers profits of a trade carried on wholly abroad, overseas property business profits, foreign dividends and interest, and foreign gains; it does not cover foreign employment income, which may instead get Overseas Workday Relief. A claim costs you the Personal Allowance and the CGT annual exempt amount for that year, and the claimed income still counts in adjusted net income for the High Income Child Benefit Charge and childcare support. The 4 years run consecutively from the start of UK residence and cannot be saved for later (GOV.UK FIG guidance).

Q Will I lose UK State Pension years?

Years abroad without UK contributions or credits are not qualifying years. Options: (a) Voluntary Class 3, £18.40 a week in 2026/27, £956.80 for a full year. For time abroad after 5 April 2026 you can pay Class 3 only if you previously lived in the UK for 10 years in a row or have paid 10 years of qualifying contributions. (b) Voluntary Class 2 cannot be paid for time abroad from 2026/27; for 2025/26 and earlier it was possible if you worked in the UK immediately before leaving and worked abroad, plus a 3-year residence or contribution condition (GOV.UK). (c) Work abroad: contributions paid in the EEA, Switzerland or a country with a UK social security agreement can count towards entitlement to the UK State Pension (GOV.UK). You can usually pay for the past 6 tax years. Each extra qualifying year adds about £6.89 a week (1/35 of the £241.30 full new State Pension), but check your forecast first: a year adds nothing if you will reach 35 years anyway.

Q What about my foreign pension?

Once you are UK resident, a foreign pension in payment is normally taxable in the UK, subject to the double taxation agreement with the paying country, which decides which country may tax it and how double tax is relieved (GOV.UK taxed twice). During your first 4 years, foreign pension income is one of the types of qualifying foreign income you can claim under the FIG regime, apart from some types HMRC treats as disqualified (HMRC RFIG45100). Moving a foreign pension into a UK registered scheme depends on the foreign scheme allowing the transfer and a UK scheme accepting it, and the foreign country may tax the transfer. These decisions are hard to undo; take regulated advice that covers both countries.

Q How do I handle foreign property?

(a) Rental income: taxable in the UK while you are UK resident, unless you claim the FIG regime for it during your first 4 years (overseas property profits are eligible). Foreign tax on the same income can usually be credited against the UK tax. (b) Selling: a UK resident pays Capital Gains Tax on worldwide gains, again unless the gain is claimed under the FIG regime; the country where the property is may also tax it. (c) Inheritance Tax: since 6 April 2025 worldwide assets are within IHT once you are a "long-term UK resident", meaning UK resident for at least 10 of the previous 20 tax years (IHTA 1984 s.6A). (d) Overseas Workday Relief is separate: it relieves employment income for duties performed outside the UK in your first 4 years, limited to the lower of 30% of the qualifying employment income or £300,000 a year, and it no longer requires the money to be kept offshore (HMRC OWR guidance).

Q What about my foreign bank accounts?

Once UK resident, interest on foreign accounts is taxable in the UK unless claimed under the FIG regime, and must go on your Self Assessment return. Under the Common Reporting Standard many overseas banks report accounts held by UK residents to HMRC. For individuals, gains and losses on foreign currency held in a bank account are outside Capital Gains Tax (TCGA 1992 s.252). If you have undeclared UK tax from earlier years on offshore income, HMRC's Worldwide Disclosure Facility is the route to put it right; offshore penalties can be higher than domestic ones.

Q What if my spouse is not long-term UK resident?

Transfers between spouses or civil partners are normally exempt from Inheritance Tax. If the person giving is a long-term UK resident but the spouse receiving is not, the exemption is capped at the nil-rate band, £325,000, less any amount already used (IHTA 1984 s.18(2) and (2A)). Long-term UK resident means UK resident for at least 10 of the previous 20 tax years (s.6A). Cross-border estates also depend on succession law and any estate-tax treaty, so take advice in both countries before moving assets between you.

Q What's the entry checklist?

(1) Work out your residence status and any split year for the year you arrive. (2) Open or reactivate a UK bank account. (3) Register with a GP. (4) Check your NI record and State Pension forecast. (5) Register for Self Assessment if you need a return, for example to claim split-year treatment or the FIG regime. (6) An ISA can be opened once you are UK resident; the £20,000 allowance is per tax year. (7) Review foreign income, gains, pensions and assets before deciding what to claim under the FIG regime. (8) If buying a home in England or Northern Ireland, check whether the 2% non-resident SDLT surcharge applies and whether you can later claim it back. (9) Check whether your driving licence can be used or exchanged in the UK. (10) Take advice covering both countries where significant assets or pensions are involved.