Due to recent events, some previously non-resident clients are discussing whether or not they are going to return to the UK. If you are non-resident for UK tax purposes, there are various criteria that must be met - and returning to the UK early or for a prolonged period could have a significant impact on your UK tax position.

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90 Days in the UK

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Whilst it’s not the only criteria for becoming non-UK resident, the general rule of thumb is that to remain non-UK resident you cannot spend more than 90 days in the UK during any tax year (the number of days can vary depending on individual circumstances, but this is the most common).

Spending more time in the UK due to the disruption and uncertainty overseas could mean you breach the limit in a tax year.

HMRC are considering whether to make a concession for additional days spent in the UK (a similar concession was introduced during COVID where people were unable to travel easily between countries), but this has not been confirmed as yet, so should not be relied upon.

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Returning to the UK too soon

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If you leave the UK partway through a tax year, you can be treated as being non-UK resident from the date you leave (called a ‘split year’) – BUT one of the criteria is that you must be non-UK resident in the following tax year.

For example, if you left the UK in July 2025, and intended to remain non-UK resident until at least April 2027, you could be non-UK resident from the date you left.

If you decided to return early and/or spent more than 90 days in the UK in the year ended 05 April 2027, this would mean not only being UK resident for 26/27 but also not qualifying for the ‘split year’ in the year you leave the UK – this could result in ALL of your overseas income now being taxable in the UK.

If you have sold UK investments whilst overseas, you may have been exempt from UK capital gains tax – but if you become temporary non-resident, which means you do not remain non-UK resident for 5 complete years, these gains are revived in the year you return to the UK.

A common  misconception is that the UK tax position is only affected when the funds are  brought into the UK – this is incorrect, and leaving the funds outside the UK  does not mean they are not taxable here.

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Impact

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If you are non-UK resident for tax purposes, then any income earned overseas is not taxable in the UK. If you spend too long here or return early and fail to meet the non-resident criteria, this can result in those earnings from overseas falling to be liable to UK tax, in which case they will have to be declared to the authorities and any tax due settled.

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Action

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The above is not exhaustive, and the criteria to be non-UK resident for tax purposes is complex and needs considering along with individual circumstances. If you are considering returning to, or even leaving the UK, please ensure you receive professional advice before doing so, both to remain tax compliant but also ensure that such decisions can be timed in the most tax efficient manner where possible.

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Get in touch

If you would like to discuss your position, please get in touch.

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