How to file a tax return if you live or work outside the UK

Most people have a choice of how to file their tax return and can choose to do so by filling in forms on the HMRC website. But this option isn't open to those who are non-resident and earning money in this country (such as a non-resident landlord owning and renting out property in the UK).

This article explains everything you need to know about being a non-resident and filing tax returns.

untied is HMRC recognised software that makes it quick and easy for non-residents to file their tax returns direct to HMRC. Try free for 30 days here.

An introduction

If you’ve always lived in the UK, then you’ll be taxed in the UK on your worldwide income. So if you live in Manchester and own a property in Paris and receive rental income, you’ll get taxed on that.

If you’ve always lived outside the UK and are earning money here, then you’ll broadly be taxed just on UK income. So if you've always lived in Paris but own property you're renting out in Manchester, you’ll pay UK tax on the rent you receive from that property.

Lots of international agreements – tax treaties – exist to reduce the impact of being taxed twice.

From a tax point of view, there are two things that can affect how you’re taxed. First, where you are resident – if you are non-resident then you will generally only be taxed on what you earn in the UK.

The other consideration is your domicile (usually where you were born) - if you’re not UK domiciled, but live in the UK, then you can apply to only be taxed on money you bring to the UK - the “remittance basis”.

Are you a UK resident and what does it mean if you’re not?

It’s important to know if you’re a UK resident or not. This may affect your UK tax liability and your entitlement to income tax allowances and exemptions.

If you are a non-UK resident, you will still have to declare income you receive from UK sources or gains you make from assets in the UK, and you may have to pay tax on them. This is done via SA109, a residency form that is part of the self-assessment tax return.

We’ve pulled together the most commonly asked questions to help you work out if you need to fill in a SA109 form and, if so, how to do this.

Residency tests apply to the tax year, which runs from 6 April to 5 April.

What is an SA109 form?

SA109 is the residency form that is part of a self-assessment tax return.

It’s the core form for people who are non-resident landlords, for others earning in this country, and for those who are “non-doms” who want to use the remittance basis.

Who needs to fill out an SA109?

An SA109 is for individuals who:

  • are not resident in the UK
  • are not a UK resident but were prevented from leaving the UK because of COVID-19 and performed UK employment duties in the period they were unable to leave the UK
  • are resident in the UK and:
    • are eligible for overseas workday relief (OWR)
    • became UK resident during this tax year
    • are due split year treatment
    • have a domicile outside the UK
    • have foreign income or capital gains and want to use the remittance basis for the 2020 to 2021 tax year

Am I UK resident?

When you’re not UK resident

It can be easier to start by working out if you are not UK-resident.

You’re not UK resident if:

  • you were resident in the UK for one or more of the previous three tax years, and you spent fewer than 16 days in the UK in the tax year.
  • you were resident for none of the previous three tax years and spent fewer than 46 days in the UK in the tax year.
  • if you worked full-time overseas in the tax year and:
      • spent less than 91 days in the UK
      • worked no more than 31 days in the UK (a working day is 3 hours for this test)
      • had no significant break in the overseas work (31 days or more)

When you are UK resident

You’re UK resident for tax purposes if you spend 183 days or more in the UK in the tax year (which runs from 6 April to the following 5 April).

If you don’t meet this condition, then you may still be resident if you own a home in the UK or work in the UK. You can find more information on these here.

Having established your residence, you can them make the most of form SA109.

What does the SA109 do?

The form does various things, including enabling people who are not UK residents to claim UK personal allowances, and to allow those who are residents but not domiciled in this country (broadly people who are here for a limited period) to only pay tax on overseas earnings brought into the UK (the “remittance basis”).

Is this similar to the form R43?

If you are filling in a tax return, you are unlikely to also need form R43 (this is a form that enables you to claim personal allowances and a tax repayment if you're not resident in the UK). There is an overlap in what they do.

How do I submit the SA109?

If you need to complete the SA109, then you cannot do so directly with HMRC.

You can either do so on paper (yes, paper!!!) alongside your paper (once again - yes, paper!!) based tax return, or use software to do so.

We’ve designed untied to make it quick and easy. There’s more detail on how to fill in your SA109 in untied here

untied includes all the supplementary pages you need to prepare and submit your return. It removes all complexity for non-resident tax returns and gives you a clear view of your tax position at any point in the tax year. Sign up for a free trial today!

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