Personal allowance for non-residents

Published: 15 Dec 2016

Updated: 15 Dec 2016

 

Written by

 

Personal Allowance for Non-residentsTypically, a non-UK resident will only be taxable on UK rental profits.  A generous tax relief available for a UK landlord is the personal allowance.  However, not all non-residents will be entitled to it.

British and EEA nationals

Double tax treaty

Not entitled to a UK personal allowance

Resident but not national within the EEA

Summary

 

British and EEA nationals

 

A national of the Britain or the EEA area is entitled to a UK personal allowance.  Generally, a British passport holder or citizen is regarded as a national for tax purposes.

 

Double tax treaty

 

The Double Tax treaty of most countries will entitle many other people to a UK personal allowance.  A list of tax treaties can be read here: Digest_of_Double_Taxation_Treaties.

 

Most commonly a person will be entitled to the allowance if N and R.  This means that the personal allowance is available to individuals who are both a national and a resident of the territory.  However often, it is only a requirement to be resident.  This is designated by the symbol R.

 

Not entitled to a UK personal allowance

 

The two largest economies, USA and China, are both notable exceptions. Where the Digest indicates “no”, only a resident of that country who is a UK or EEA national will be entitled to the allowance.  A “no” is designated to many other countries in Africa, South America and the Middle East:  Saudi Arabia, Mexico being two of the larger examples.  The list of “nos” includes many British Overseas Territories, such as the Cayman and British Virgin Islands.  Residents of other low tax jurisdictions such as Qatar, Brunei, Bahrain and Hong Kong are also barred from the UK allowance.

 

Resident but not national within the EEA

 

The Double Tax treaty Digest explains that EEA citizens (i.e. nationals) are entitled to the UK Personal Allowance.  However, some individuals may be resident of an EEA country without being a citizen.  In this case, it will be necessary to check through the country listing to see whether the Double Tax Agreement permits a UK personal allowance.  An allowance would not, for instance, be available to a resident of Sweden, Spain, Poland, Norway, Liechtenstein, Iceland, Hungary, Greece, Germany, Crotia, Bulgaria, unless the individual is also a national of an EEA country.

 

Summary

 

The determinants of UK personal allowance entitlement can be complex and are prone to change.  It is worth checking the digest and this manual to confirm whether the UK allowance is applicable.  Two people with apparently similar circumstance may have different eligibility.

 

Comments  

#10 Ray Coman, FCCA, CTA 2019-09-25 09:50
Dear Rosetta,

I advise that you and your husband is resident in the European Economic Area, therefore you both are entitled for a UK personal allowance on your UK rental Income.
Quote
#9 Ray Coman, FCCA, CTA 2019-09-25 09:47
Dear James,

I advise that you are a UK National therefore, you are entitled to UK personal allowance on your rental income from your UK property.

You will need to check your Israeli tax position with a tax adviser in Israel. Probably the UK rental income will be treated as foreign income in Israel and exposed to local taxes. However, you would need to check the position in Israel as I can only advise on UK taxation.
Quote
#8 Rosetta 2019-09-06 12:15
Hi,
I am resident in Germany and I have a rental income from a Uk property. Am I entitled the UK personal allowance? My husband on the other hand is the owner too of the same property, but resident in Italy? Is he entitled?
Thanks
Regards
Quote
#7 James 2019-08-30 23:48
I’m a uk born uk passport holder & moved to israel in
August 2017
working as a hospital doctor employee earning a salary.

I became an israeli National with an israeli passport.
I consider myself a dual national & will one day return to
the uk.

I intend to buy a property in the uk & rent it.

As a new resident in israel(aliyah) I do not pay any israeli taxes on income derived in the uk.
I will pay uk taxes on income derived in the uk

Can I claim the personal allowance in each country
against the income derived in each country?
£12,500 in the uk & 2.25 points in israel.

Thanks
Quote
#6 Ray Coman, FCCA, CTA 2018-10-22 10:47
Yes, as a British National, you are entitled to a UK personal allowance
Quote
#5 Wai 2018-10-21 16:47
I’m a BNO (British National Oversea) passport owner and living in HK. Am I entitled the UK personal allowance? Thanks.
Quote
#4 Ray Coman, FCCA, CTA 2018-10-11 13:32
Sean, as an Irish and therefore EEA national, you are entitled to the UK personal allowance regardless of where you are resident. Your wife would probably not be entitled, because Qatar does not grant its nationals a UK personal allowance.
Quote
#3 Sean Mc Crudden 2018-10-11 13:31
Sean, as an Irish and therefore EEA national, you are entitled to the UK personal allowance regardless of where you are resident. Your wife would probably not be entitled, because Qatar does not grant its nationals a UK personal allowance.
Quote
#2 Raphael Coman, FCCA, CTA 2018-10-11 10:24
As a British passport holder you are entitled to the UK personal allowance regardless of residence.
Quote
#1 Yao 2018-07-11 19:29
Hi there
I am Chinese with British passport, I moved to South Africa in 2011. I have some rental income from UK. Am I entitled the UK personal allowance? Thanks
Regards
Quote

Add comment


Security code
Refresh

Guide Menu