UK Tax Returns for Expats: When You Must File and How to Do It Right

Becoming non-UK resident does not automatically mean your UK tax affairs are settled. A significant proportion of British expats continue to have UK tax filing obligations — whether because of rental income from UK property, capital gains on UK assets, or simply because HMRC has sent a notice to file. Understanding when you must file, how to register, and how to claim reliefs available to non-residents is essential to avoid costly penalties and unnecessary overpayment of tax.

When a Non-Resident Must File a UK Self Assessment Return

HMRC requires non-UK residents to complete a Self Assessment tax return in the following circumstances:

UK Rental Income

If you own property in the UK and receive rental income, you must file a Self Assessment return and pay income tax on the net rental profit. The Non-Resident Landlord (NRL) scheme allows some non-residents to receive gross rents (without PAYE deduction by their letting agent) if approved by HMRC, but the obligation to file and pay tax via Self Assessment remains.

Tax-deductible expenses include mortgage interest (subject to restrictions since 2020), letting agent fees, maintenance and repair costs, insurance, and legal fees. A 20% tax credit on mortgage interest replaces the prior deduction for residential landlords.

UK Capital Gains

Non-UK residents are subject to UK CGT on disposals of UK land and property (all types) and, since 2019, on gains from UK "property-rich" companies (companies where more than 75% of the value is derived from UK land). These gains must be reported within 60 days of completion via HMRC's online CGT reporting service, with the tax payable at the same time. A Self Assessment return is also required for the relevant tax year.

Non-residents are generally not liable to UK CGT on UK equities or other financial assets (subject to certain anti-avoidance provisions for short-term non-residents).

HMRC Notice to File

If HMRC issues a "Notice to Complete a Tax Return" — which they do based on their records and the Automatic Exchange of Information (AEI) under the Common Reporting Standard — you are legally required to complete and submit the return, even if you believe no tax is due.

Other UK Income

Income from UK employment performed in the UK, income from UK partnerships, UK savings interest above certain thresholds (in some cases), and income from offshore trusts with UK beneficiaries may all require filing.

Registering for Self Assessment

If you are not already registered for Self Assessment, you must notify HMRC before you can file:

• Self-employed individuals: Register via form SA1 (for non-self-employment income) or the "Register as self-employed" online service.
• Non-residents with UK income: Use form SA1 to notify HMRC. This is available online or by post.
• For non-residents in particular, the process can be slower than for UK residents as HMRC may require additional verification.

Once registered, HMRC will issue a Unique Taxpayer Reference (UTR), which you need to file returns.

Completing the P85: Notifying HMRC of Departure

Form P85 ("Leaving the UK — getting your tax right") should be completed when you leave the UK. It notifies HMRC that you have departed, provides information about your new residence, and may trigger a tax refund if you have overpaid PAYE tax in the year of departure.

The P85 is not, by itself, a Self Assessment return and does not replace the obligation to file one if you have UK income. However, submitting it promptly helps HMRC update their records, potentially prevents unnecessary "discovery" assessments, and can result in a refund of overpaid PAYE.

Split-Year Treatment: The Year of Departure or Arrival

In the tax year that you depart the UK (or return to it), you may be eligible for "split-year treatment." This divides the tax year into a "UK part" (when you were resident) and an "overseas part" (when you were not), ensuring that you are only taxed as a UK resident for the portion of the year you were actually resident.

Split-year treatment must be claimed — it is not automatic. The claim is made in your Self Assessment tax return for the relevant year, using the supplementary pages SA109 (Residence, remittance basis, etc.).

There are eight different split-year cases under the Statutory Residence Test. The most common for departing individuals are Case 1 (starting full-time work abroad) and Case 4 (accompanying a partner starting full-time work abroad). Each case has specific conditions that must be met.

Online Filing Deadline: 31 January

For most taxpayers filing online, the Self Assessment return deadline is 31 January following the end of the tax year. The UK tax year runs from 6 April to 5 April, so the return for 2025–26 (ending 5 April 2026) is due by 31 January 2027.

Any tax due for that year (above any payments on account already made) must also be paid by 31 January.

For paper returns (a declining but still available option), the deadline is 31 October.

Non-residents filing from abroad use the same online system (Government Gateway) and the same deadlines. There is no extension for overseas filing.

Penalties for Late Filing and Late Payment

HMRC's penalty regime is strict and automated:

• Day 1 (filing after deadline): £100 automatic penalty, even if no tax is owed.
• Three months late: Daily penalties of £10 per day, up to a maximum of £900 (90 days × £10).
• Six months late: 5% of tax due (or £300, whichever is greater) as an additional penalty.
• Twelve months late: Further 5% of tax due (or £300, whichever is greater) — or, in cases involving deliberate suppression, up to 200% of tax due.

Late payment of tax also attracts interest (currently at Bank Rate plus 4% from 6 April 2025) and, from 30 days after the deadline, a 5% late payment penalty.

For non-residents who fail to file for multiple years, accumulated penalties can run to several thousand pounds even before any tax liability is considered.

Non-Resident Landlord Scheme Compliance

If you rent out UK property while non-resident, you must either:

1. Have your letting agent deduct basic-rate income tax (20%) from the rent and remit it to HMRC; or
2. Apply to receive gross rents under the Non-Resident Landlord (NRL) scheme by completing form NRL1.

Approval under the NRL scheme allows the letting agent to pay rent gross (without deduction). This does not mean the income escapes tax — it must still be reported via Self Assessment and tax paid at the appropriate rate. The NRL scheme simply allows cash-flow flexibility.

Letting agents who pay rent to an overseas landlord without NRL scheme approval and without deducting tax at source are themselves liable to HMRC for the undeducted tax. This creates an incentive for agents to ensure compliance.

Keeping Records While Abroad

HMRC requires taxpayers to retain records supporting their Self Assessment return for at least five years after the filing deadline. For non-residents, this should include:

• Evidence of rental income, expenses, and agent statements.
• Evidence of days spent in the UK each year (flight records, bank statements, diary entries) to support Statutory Residence Test calculations.
• Documents evidencing the split-year treatment claim if applicable.
• Capital gains calculations and supporting purchase/sale documents.

Inadequate records can lead to estimated assessments, penalties, and the burden of proving HMRC wrong at an enquiry stage.

How Global Investments Can Help

Managing UK tax compliance from abroad is an area where professional assistance pays for itself many times over. The interaction between UK tax obligations, overseas tax residence rules, available double tax treaties, and estate planning considerations is complex and individual.

Global Investments works with internationally mobile clients to ensure their UK tax affairs remain fully compliant — from the initial departure process (P85, SRT analysis, split-year treatment) through annual self-assessment filings, non-resident landlord scheme management, and capital gains reporting on property disposals. We coordinate with UK tax advisers and accountants to deliver a complete service.

Tax rules are subject to change. This article provides a general overview of the UK Self Assessment obligations for non-residents as at 2026. This article is for informational purposes and does not constitute personalised tax advice. Always seek qualified professional advice for your specific circumstances.