How Much Foreign Income Is Tax-Free in the UK? 2026/27
Quick answer
There is no flat tax-free amount for foreign income. UK residents are taxed on their worldwide income, but new arrivals not UK resident in the prior 10 years can claim relief under the 4-year FIG regime. Small trading or property income under GBP 1,000 needs no report.
How your foreign income is taxed in the UK (2026/27)
| Your situation | How your foreign income is taxed in the UK |
|---|---|
| UK resident, long-term or formerly UK domiciled | You are taxed on your worldwide income, including foreign income, usually through Self Assessment |
| New arrival eligible for the 4-year FIG regime | You can claim relief on qualifying foreign income and gains that arise in your first 4 years of UK residence, if you were not UK resident in the previous 10 consecutive tax years. The claim must be made each year on your tax return |
| Non-UK resident | Only your UK-source income is taxed in the UK. Foreign income is not taxed here |
| Trading or property income under GBP 1,000 | Covered by the GBP 1,000 trading allowance and the separate GBP 1,000 property allowance, so it is tax-free and usually need not be reported |
| Foreign savings interest within the Personal Savings Allowance | Tax-free up to GBP 1,000 (basic rate), GBP 500 (higher rate) or GBP 0 (additional rate) |
| Foreign dividends within the dividend allowance | Tax-free up to GBP 500 a year; only dividends above this are taxed |
There is no fixed tax-free band for foreign income the way there is a Personal Allowance for your wages. How much overseas income you can receive tax-free depends almost entirely on your residence status. If you are UK resident under the Statutory Residence Test, the starting point is that your worldwide income is taxable in the UK; if you are non-UK resident, only your UK-source income is taxed here.
The big change came on 6 April 2025, when the remittance basis for non-domiciled residents was abolished and replaced by the 4-year Foreign Income and Gains (FIG) regime. The old idea that you could leave under GBP 2,000 of unremitted foreign income untaxed no longer applies. Instead, a recent arrival who was not UK resident in the previous 10 consecutive tax years can claim relief on qualifying foreign income and gains during their first 4 years of UK residence, but the claim has to be made each year on a Self Assessment return. Separately, small amounts stay tax-free for everyone: the GBP 1,000 trading allowance, the GBP 1,000 property allowance, the Personal Savings Allowance, and the GBP 500 dividend allowance all apply to foreign sources too.
To work out which column you sit in, start with residence. Our pillar guide on UK tax residency explained walks through the Statutory Residence Test, UK non-resident tax rules covers what a non-resident still owes here, and am I still UK resident if I live abroad helps if you have moved overseas but are not sure you have shed UK residence.
Frequently asked questions
How much foreign income is tax-free in the UK?
There is no single tax-free figure for foreign income. If you are UK resident your worldwide income is taxable, though small trading or property income under GBP 1,000, savings interest within your Personal Savings Allowance, and dividends up to the GBP 500 allowance are tax-free. New arrivals may claim the 4-year FIG regime.
Do I have to declare foreign income under GBP 2,000?
No longer in the way you may have read. The old rule that let non-domiciled residents leave under GBP 2,000 of unremitted foreign income untaxed was part of the remittance basis, which was abolished on 6 April 2025. UK residents are now taxed on worldwide income unless they qualify for the 4-year FIG regime.
What is the FIG regime?
The Foreign Income and Gains (FIG) regime replaced the remittance basis on 6 April 2025. If you become UK resident after at least 10 consecutive tax years of non-UK residence, you can claim relief on qualifying foreign income and gains arising in your first 4 years of UK residence. You must claim it each year on your Self Assessment return.
Do non-UK residents pay UK tax on foreign income?
No. If you are non-UK resident under the Statutory Residence Test, only your UK-source income, such as UK rent or some UK pensions, is taxable in the UK. Your foreign income is not taxed here, though it may be taxable in the country where you live.
Sources
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General information, not financial advice. Tax rules and figures can change; check the current position on gov.uk before acting.