Reporting foreign income for UK tax purposes

Income Tax is generally payable on taxable income received by individuals including earnings from employment, earnings from self-employment, pensions income, interest on most savings, dividend income, rental income and trust income. The tax rules for foreign income can be complex. However, if you are resident in the UK you will need to pay UK Income Tax on your foreign income, such as:

• wages if you work abroad
• foreign investments and savings interest
• rental income on overseas property
• income from pensions held overseas

Foreign income is defined as any income from outside England, Scotland, Wales and Northern Ireland. The Channel Islands and the Isle of Man are classed as foreign.

If you are a UK resident, you will usually need to complete a Self-Assessment tax return for foreign income or capital gains. The main exception is if your only foreign income is dividends and if your total dividends – including UK dividends – are less than the £2,000 dividend allowance or you have no other income to report.