UK Personal Allowance for non-residents

Published: 08 Oct 2018

Updated: 07 Mar 2020

 

Written by Ray Coman

 

UK Personal Allowance for non-residentsA non-resident is only liable to UK tax on income arising in the UK. The most common example of UK arising income is rental profits. Savings and investment income is disregarded for tax purposes.

 

Entitlement to the UK personal allowance will exempt rental profits below the annual limit. Where profits exceed the allowance, it is only excess which would be taxable.

 

The UK
National and resident
The European Economic Area (EEA)
EEA countries listed
Residence only
National only
No entitlement to allowance
Double Tax Treaty Digest Table

 

The UK

 

A person who is resident in the UK is entitled to a personal allowance regardless of their nationality. Loss of personal allowance occurs where income exceeds £100,000 and for people claiming the remittance basis as the personal allowance summary explains.

 

A person who is UK national can obtain the UK allowance wherever resident. This is the same as for EEA nationals (see below.)

 

The effect of UK nationality for this purpose is extended to certain crown employees such as: diplomats, civil servants and members of HM Armed forces.

 

National and resident

 

Most major countries in the world grant a UK personal allowance to their residents only if that person also holds nationality of that country. For instance, a person living in Argentina, with only Australian nationality would not be entitled to a UK personal allowance. Only people with Argentinian nationality would be eligible. In the Table below N&R signifies this status.

 

The European Economic Area (EEA)

 

An exception to the N&R rule explained above applies within the EEA. A person who is national and resident of an EEA country is entitled to the UK personal allowance regardless of where they are resident. Therefore, if an EEA country in the Table below has No or just N or just R, this applies only to individuals who are not EEA National.

 

EEA countries listed

 

Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.

Switzerland is not in the EEA.

 

Residence only

 

Most countries require that an individual is both national and resident to be granted a UK personal allowance. However, some countries require only that the person is resident. For instance, Kenya require only that you are Kenyan resident to claim the UK allowance; nationality is not considered. These countries are denoted in the Table below by R.

 

National only

 

Other countries require that you are only National of the country. The place where a person resides does not affect eligibility. For Instance, Israelis anywhere in the world can claim a UK personal allowance. The letter N next a country in the table below indicates that the above applies.

 

No entitlement to allowance

 

As the table below illustrates, eligibility to the UK personal allowance varies according to country. Some countries do not allow their residents a UK personal allowance. This includes the USA and China and many low tax jurisdictions. Countries in the list below with a No allow their residents no entitlement to the UK personal allowance.

 

Most of the major populated counties are listed in the table below. However, if a country does not appear it is unlikely that their residents would be able to claim the UK personal allowance:

 

Double Tax Treaty Digest Table

 

Country

Relief

Albania

  No

Algeria

  No 

Antigua & Barbuda

  No 

Argentina

(N&R)

Armenia

  No

Australia

(N&R)

Austria

(N&R)

Azerbaijan

(N&R)

Bahrain

  No

Bangladesh

(N&R)

Barbados

 (R)

Belarus

(N&R)

Belgium

(N&R)

Belize

  No

Bolivia

(N&R)

Bosnia - Herzegovina

(N&R)

Botswana

(N&R)

Brunei

  No

Bulgaria

(N&R)

Burma

 (R)

Canada

(N&R)

Cayman Islands

  No

Chile

  No

China

  No

Croatia*

(N&R)

Cyprus*

(N&R)

Czech Republic*

(N&R)

Denmark*

(N&R)

Egypt

(N&R)

Estonia*

(N&R)

Ethiopia

  No

Faroes

  No

Fiji

 (R)

Finland*

(N&R)

France*

(N&R)

Gambia

(N&R)

Georgia

  No

Germany*

(N&R)

Greece*

(N&R)

Grenada

  No

Hungary*

(N&R)

Iceland*

  (R)

India

(N&R)

Indonesia

(N&R)

Ireland*

(N&R)

Israel

  (N)

Italy*

(N&R)

Jamaica

  (N)

Japan

(N&R)

Jordan

(N&R)

Kosovo

  No

Kazakhstan

(N&R)

Kenya

(R)

Korea

(N&R)

Latvia*

(N&R)

Lesotho

(N&R)

Libya

  No

Liechtenstein*

  (R)

Lithuania*

(N&R)

Luxembourg *

(N&R)

Macedonia

  No

Malaysia

(N&R)

Malta*

(N&R)

Mauritius

  (R)

Mexico

  No

Moldovia

  No

Montenegro

(N&R)

Morocco

(N&R)

Namibia

  (R)

Netherlands*

(N&R)

New Zealand

(N&R)

Nigeria

(N&R)

Norway*

(N&R)

Oman

(N&R)

Pakistan

(N&R)

Panama

  No 

Papa New Guinea

(N&R)

Philippines

(N&R)

Poland*

  (R)

Portugal*

(N&R)

Qatar

  No

Romania*

(N&R)

Russian Federation

(N&R)

Saint Christopher (St. Kitts & Nevis)

  No

Saudi Arabia

  No

Serbia

(N&R)

Senegal

  No

Sierra Leone

  No

Singapore

  No

Slovakia*

(N&R)

Slovenia*

(N&R)

Solomon Islands

  No

South Africa

(N&R)

Spain*

  (R)

Sri Lanka

(N&R)

Sudan

(N&R)

Swaziland

  (R)

Sweden*

  (R)

Switzerland

(N&R)

Taiwan

(N&R)

Tajikistan

  No

Thailand

(N&R)

Trinidad and Tobago

(N&R)

Tunisia

(N&R)

Turkey

(N&R)

Turkmenistan

(N&R)

Tuvalu

  No

Uganda

(N&R)

Ukraine

(N&R)

United Arab Emirates

  No

United Kingdom*

(Yes)

Uruguay

  No

USA

  No

Uzbekistan

(N&R)

Venezuela

(N&R)

Vietnam

(N&R)

Zambia

  No

Zimbabwe

(N&R)

 

 *EEA countries

 

Comments  

#40 Ray Coman, FCCA, 2020-06-26 09:21
Dear Catherine,

You are entitled to the UK personal allowance if you hold a British passport. It makes not difference to your eligibility what income you receive. However, it is only usually rental income and certain pension/ employment earnings which are taxable for non-residents.

UK civil service pension will remain taxable in the UK. However, most private pensions and the UK state pension are not taxable for non-residents.

You would need to complete form DT individual (applicable to the country in which you are resident) to get any private pension paid gross. The state pension is paid without deduction of tax at source.
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#39 Ray Coman, FCCA, 2020-06-26 09:13
Dear Deborah,

As an European Economic Area citizen you are entitled to the UK personal allowance regardless of where you are resident. Further information can be read here: https://www.gov.uk/tax-uk-income-live-abroad/personal-allowance
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#38 Deborah 2020-06-03 09:17
I am a UK citizen. My husband is an Irish citizen. We get rent from properties in the UK. We lived in China for some years and now we live in New Zealand. Are we eligible for the UK personal allowance?
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#37 Catherine Andrew 2020-05-05 17:06
I'm a UK Citizen, living in the UAE. Am I allowed the Personal Allowance? My only UK income is rental income from a single property and a small UK private pension plan paid monthly. Total amounts are less than the Personal Allowance threshold. Thanks
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#36 Raphael Coman 2020-05-03 16:19
Dom,

Since you are a UK citizen, you will be entitled to the personal allowance. Citizenship is usually determined by holding of a UK passport
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#35 Dom 2020-04-25 11:26
UK Citizen, living in Singapore. Am I allowed the Personal Allowance. My only UK income is rental income from a single property.
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#34 Ray Coman, FCCA, CTA 2020-03-23 12:43
Saeed,

If you live in Nigeria and have Nigeria residency you are entitled to the personal allowance.
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#33 Saeed 2020-03-19 15:46
Hi - I live in Nigeria and am thinking of buying a property to rent out. Would I get the personal allowance for this? Thank you!
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#32 Ray Coman, FCCA, CTA 2020-03-14 15:32
Dear Zain,

Dividend income is disregarded, so you do not have to pay tax or report the dividend income in the UK. More information can be found here:
https://www.gov.uk/government/publications/non-residents-and-investment-income-hs300-self-assessment-helpsheet/hs300-non-residents-and-investment-income-2019

Check you position in the USA regarding any exposure to local taxes.
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#31 Ray Coman, FCCA, CTA 2020-03-14 15:26
Dear CWK,

1 and 2) When you start receiving UK rental income you need to 'register for self assessment'. Please complete the following form:
https://www.tax.service.gov.uk/shortforms/form/SA1
3) Yes, you are entitled to a personal allowance. The tax year ends on 5 April. The earliest you can file a Tax Return for 2019-20 is 6 April 2020. You need to report your rental income on the Tax Return. This form can be completed online.
4) It is not necessary for the mortgage to be secured against the property that you are letting for the interest to obtain tax relief. It is only necessary to demonstrate that the loan was for the purpose of your rental business. However, it would be much easier to demonstrate to HMRC that the loan was for rental purposes if secured against your rental property. You could need to demonstrate the purpose of the loan in the event of an HMRC enquiry.
5) If you are planning to do the Tax Return without the assistance of an accountant, you would need a government gateway user ID and password.
6) Yes allowable costs include VAT.
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#30 Zain 2020-03-12 16:26
Hello
Is a US citizen who is non-resident in the UK, and who receives dividends from a UK company, entitled to UK personal allowance? Thank you.
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#29 CWK 2020-03-12 07:37
Hello

My wife and I bought a UK residential property (jointly) recently on a buy to let basis. I am a non UK resident. I live in Hong Kong and hold a BNO (British National Overseas) passport. I have a few questions and would appreciate your guidance.

1. Do we have to get tax registration in the UK as we expect to receive rental income? If so, when, and is there a standard form?
2. Is there a requirement to notify the HMRC chargeability to tax? If so, when, and is there a standard form?
3. As BNO passport holder, am I entitled to UK personal allowance? If so, do I need to file a form to claim allowance? Which form and by when?
4. We refinance our home property in Hong Kong (effectively a mortgage secured by a Hong Kong property) to fund our purchase of residential property in UK. Mortgage interest is paid to a bank in Hong Kong. Can this interest be allowed as a tax deduction against the UK rental income? If so, how I can prove that the Hong Kong mortgage is obtained to fund the UK residential property? Would it be possible if you direct me to the relevant sections in the tax code?
5. We will use a letting agent to manage the UK rental property and we will sign a form such that we receive full amount of rental income (no deduction from letting agent). Which tax return form(s) should I use to report my rental income to HMRC? A link to the form(s) is helpful.
6. In relation to costs that I will incurred in producing the rental income (e.g. repair, letting agent fees etc), I understand these will be allowed as tax deduction. Would the allowable costs include the VAT that is charged?

Thanks
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#28 Ray Coman, FCCA, CTA 2020-02-27 09:22
Diego,

As an EEA National, you are entitled to a personal allowance wherever resident.
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#27 Diego 2020-02-26 19:36
I am Portuguese but I live in the US, can I claim the UK personal allowance?
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#26 Ray Coman, FCCA, CTA 2020-02-14 09:34
Dear Waseem,

As a UK resident you are liable to tax on your worldwide income. Therefore the Pakistani pension would be taxable. If you have had any tax withheld at source in Pakistan, this tax would be available as a credit to reduce any UK tax on that pension income.
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#25 Waseem Shazaad 2020-02-13 17:45
I am retired (pensioner) Pakistan Armed forces officer and residing in UK since 2019. ( I am not British citizen ) I never worked in UK before and my pension is paid by the Federal Govt of Pakistan. Please advise me (a) whether or not my Pakistan pension would be Taxable in UK. if I credit it into my account in here in UK. (b) and would it be taxable at a later stage when I acquire British citizenship.

As per my understanding since whatever pension I am drawing, that has nothing to do with Uk Govt since I never worked here in UK ever before coming here.
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#24 Ray Coman, FCCA 2020-02-05 11:19
Aisha,

Under the terms of the double tax treaty with the US (at the time of writing) you would not be entitled to a UK personal allowance
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#23 Aisha Badsha 2020-02-05 11:18
How do I claim the UK personal allowance if I am resident in US but a citizen of Pakistan
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#22 Ray Coman, FCCA 2019-12-16 09:24
Colin,

If you are resident and national of Botswana you would be entitled to a UK Personal allowance.

It would seem that your income is less than the applicable allowance and therefore you have no tax to pay. However, I would need to establish further information in a meeting to give assurance about what i have explained above.
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#21 Colin McVey 2019-12-14 07:43
Born in UK of citizen parents, I relinquished UK nationality (with right to reacquire) to work/live in Botswana which does not allow dual nationality and then did not provide for non Botswana national resident status, am UK non resident but registered for Self Assessment.

My sole UK income for 2018/19 was 1-profit on rent from my house £2,637 (after allowable expenses).
2-non resident UK state pension £5,005. 3-private pension £3,710.

Does this suggest I am entitled to any income allowance, or approximately what tax would be payable - thank you CM
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#20 Ray Coman, FCCA, CTA 2019-10-22 14:43
Colin, a UK resident is liable to UK tax on worldwide income. However, Gibraltar is not part of the UK. It is described as a British Overseas Territory.

A non-UK resident is not liable to tax on most forms of income apart from rental profits on property situated in the UK.
https://www.gov.uk/tax-uk-income-live-abroad
This means that you would not be liable to UK tax on state pension or most other pension earnings. A civil service pension remains taxable in the UK:
https://www.gov.uk/tax-on-pension/tax-when-you-live-abroad
You are entitled to a UK personal allowance as a citizen of the EEA, or as a British passport holder.
It is possible that there has been some mix-up which has led HMRC to regard you as UK resident which would explain the correspondence you have received. I cannot go into the specifics of you case in this public comment, but you can send a private message if you would like to use my services to get the matter resolved.
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#19 Colin Thompson 2019-10-22 13:30
I am a tax resident of Gibraltar and well aware of the tax situation there having previously been a tax resident of Spain. I have a personal allowance of GBP12500, established in 2002 when first moving to Spain albeit at lower rates! HMRC are now proposing to tax me on my UK state pension, personal pensions and UK property rental income offsetting these with the personal allowance which they are not currently questioning. HMRC cite the lack of a Double Taxation Agreement between Gibraltar and the UK as the reason for this. I suspect that this is valid but I need confirmation before questioning this since they have provided me with the opportunity to do so. It may not be relevant but I have been a non UK tax resident since 2002 and rarely visit the UK and meet the most stringent of UK non residency tests.
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#18 Ray Coman, FCCA, CTA 2019-10-21 09:16
Dear Hung,

From 6 April 2010 onwards, citizen of Hong Kong have not been able to claim the persona allowance. HMRC would accept that you are a British national if you a British passport holder.

However, the website below confirms that prior to the handover of control, Hong Kong citizens could obtain a British passport.

Your rights as British national overseas are to hold a British passport. Therefore, provided you hold this passport you are entitled to the personal allowance.
https://www.gov.uk/types-of-british-nationality/british-national-overseas
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#17 Hung 2019-10-19 13:52
Are Hong Kong residents eligible for UK personal allowance if they hold British National (Overseas) Passport? As far as I know , holder of this passport is considered as British National.
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#16 Ray Coman, FCCA, CTA 2019-10-04 09:17
Dear S.C.

British national (overseas) has the right to hold a British passport. Provided you have this passport you are entitled to a UK personal allowance.
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#15 S.C. 2019-10-04 05:30
Hi! I’m a BNO (British National Oversea) passport holder and living in Hong Kong. Am I entitled the UK personal allowance? Thanks.
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#14 Ray Coman, FCCA, CTA 2019-09-25 08:07
Dear M Griffin,

I advise that as a former British national you are probably entitled to the UK personal allowance. However, this only spares you from UK tax.

You will need to check your Swedish tax position with a Swedish tax adviser. The UK personal allowance cannot be used against your Swedish income. Probably the UK pension will be treated as foreign income Swedish and exposed to local taxes. However, you would need to check the position in Sweden as I can only advise on UK taxation.
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#13 M Griffin 2019-09-20 12:37
As a non resident o the UK I am thinking of taking up residency in Sweden. The Uk personal allowance applied to my UK pension is £12,500. Is the UK personal allowance carried over to Sweden or must I pay tax on the £12,500 in Sweden?
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#12 Ray Coman, FCCA, CTA 2019-08-19 10:24
Dear Alan,

Probably you are not entitled to a personal allowance unless also a citizen of the EEA or a British passport holder.
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#11 Alan 2019-08-19 09:50
Hi,
I am an Australian residing in Hong Kong. I got a property in UK with rental income. Am I entitled to the UK personal allowance? Thanks!
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#10 Ray Coman, FCCA, CTA 2019-07-07 12:14
Dear Guido,

You will not be entitled to a personal allowance as Switzerland is not part of the EEA:
https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm10340
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#9 Guido 2019-07-07 11:35
Thanks for all this helpful information.
I am a Swiss Citizen living in the US, having property rental income in the UK. Am I entitled to the UK personal allowance? I am not quite clear on that.
Thanks.
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#8 Ray Coman, FCCA, CTA 2019-07-04 10:17
Dear Nabeel,

Based on the information you have provided, you cannot claim the personal allowance
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#7 Nabeel Almoayed 2019-07-04 09:03
i am a Bahraini and have property in the UK. I reside in Bahrain. Can I claim the Personal Allowance in the Tax returns?
thanks
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#6 Ray Coman, FCCA, CTA 2019-04-28 09:29
Dear Alex,

As per the HMRC website the key determinant of nationality is that you are a UK passport holder. Provided that this is what you meant by citizenship, you would be entitled to the UK personal allowance.
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#5 Alex 2019-04-27 21:40
Dear Coman & Co.

If I receive UK residential rental income, but chose to relocate to live and work (full time) in Australia would I be entitled to keep my UK personal allowance as I have dual citizenship in both Australia and UK?

Many thanks
Alex
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#4 Ray Coman, FCCA, CTA 2019-03-23 17:12
Dear Trevor Davies,

Provided that you and your wife are British passport holders, you will be entitled to the allowance. Each spouse is assessed separately. Therefore, if only one of you fulfils the criteria only one will gain the allowance.

Your retirement in itself has not effect on your personal allowance eligibility.
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#3 Trevor Davies 2019-03-23 16:01
Dear Sirs
Thinking of applying for temporary residency in Moscow Russian Federation.
I am UK citizen, retired.
My wife of 21 years has dual citizenship ie.
UK and Russian, also retired.
Will we be entitled to UK personal allowance
for tax purposes when residency granted?
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#2 Raphael Coman, FCCA, CTA 2018-10-11 10:09
Dear Christy, sadly since 6 April 2011, Hong residents are not entitled to a UK personal allowance. You may still be entitled if UK or EEA National.
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#1 Christy Chan 2018-10-11 10:05
Please kindly advise if Hong Kong does has double taxation agreement and entitle to claim tax allowances. Thanks!
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