UK Personal Allowance for non-residents

Published: 08 Oct 2018

 

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*

  (R)

Uruguay

  No

USA

  No

Uzbekistan

(N&R)

Venezuela

(N&R)

Vietnam

(N&R)

Zambia

  No

Zimbabwe

(N&R)

 

 *EEA countries

 

Comments  

#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.
Quote
#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!
Quote

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