International tax in UK

International tax in the UK covers various aspects, including taxation of UK residents with foreign income, non-residents with UK income, and businesses operating across borders. Here is an overview:

Tax Residency & Domicile

  • UK Tax Residents: Taxed on worldwide income and gains.
  • Non-Residents: Only taxed on UK-source income.
  • Domicile: Affects inheritance tax and access to the remittance basis (where foreign income is only taxed if brought to the UK).

 Double Taxation Relief

  • The UK has double taxation agreements (DTAs) with many countries to prevent paying tax twice on the same income.
  • Foreign Tax Credit Relief can offset foreign taxes paid against UK tax liability.

UK Taxation of Foreign Income

  • Employment & Pensions: Foreign earnings are taxable for UK residents.
  • Rental Income: UK residents must report overseas property income.
  • Dividends & Interest: Foreign investments are taxable but may have relief under DTAs.

Non-Resident Landlord Scheme

  • If a non-UK resident earns rental income from UK property, the letting agent or tenant may deduct tax at 20% before payment.

Business Taxation

  • Permanent Establishment (PE): If a foreign company has a PE in the UK, profits attributable to it are subject to UK Corporation Tax.
  • Transfer Pricing Rules: Transactions between related entities must be conducted on an arm’s length basis.
  • Controlled Foreign Companies (CFC) Rules: Prevent UK companies from diverting profits to low-tax jurisdictions.

VAT & Customs Duties

  • VAT on Imports & Exports: Goods and services imported/exported have specific VAT treatments, especially post-Brexit.
  • Customs Duties: Applicable when importing goods from outside the UK.

Expat Tax Considerations

  • UK Expats Abroad: May still be liable for UK tax depending on residency.
  • Foreign Workers in the UK: May qualify for tax relief under certain conditions.

Would you like information on a specific aspect of international tax in the UK?