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United Kingdom Tax Guide

Europe

Last verified June 2026

Sources & verification

Figures on this page were last verified against the cited sources in June 2026. Always check official sources before making a relocation or incorporation decision.

GOV.UK — HS266 Foreign Income and Gains (FIG) regime LITRG — FIG regime (tax years from 2025/26)HMRC

High Tax Comparator

Best for

Special regime available
Foreign Income & Gains (FIG) regime — 4-year exemption on qualifying foreign income and gains for new UK residents after 10+ consecutive n…

Personal Tax Score

42/100

High Tax

Business Tax Score

68/100

Moderate

Personal Income Tax

Tax Residency

Day Threshold

183 days

Note

183 days or automatic overseas tests; statutory residence test applies

Income Tax Rates

Top Marginal Rate

45%

Structure

Progressive 0-45% (England); Scotland has different bands

Foreign Income Treatment

System

Worldwide

Details

All UK residents taxed on worldwide income on arising basis from 6 April 2025. Qualifying new residents can elect into the FIG regime for their first 4 years (see special regimes).

Investment Income

Capital Gains

18-24%%

Dividends

8.75-39.35%%

Interest

20-45%%

18% lower rate / 24% higher rate from 30 Oct 2024 Budget; 24% for residential property

Wealth & Inheritance

Wealth Tax

No - No wealth tax; council tax on property

Inheritance Tax

Yes - 40% above £325,000 nil-rate band. From 6 April 2025, IHT moved to a residence-based system (long-term residents in scope on worldwide assets after 10 of last 20 UK tax years).

Special Regimes

Foreign Income & Gains (FIG) regime

4-year exemption on qualifying foreign income and gains for new UK residents after 10+ consecutive non-resident years. Claim must be made each year. Replaced the remittance basis from 6 April 2025.

Temporary Repatriation Facility (TRF)

For prior remittance-basis users: designate pre-6 April 2025 foreign income/gains at 12% during 2025-26 and 2026-27 tax years, rising to 15% for 2027-28. Three-year window only.

Practical Notes

Non-dom / remittance basis abolished 6 April 2025. New 4-year FIG regime is far narrower than non-dom (4 years vs effectively indefinite). High overall tax burden remains; National Insurance contributions additional.

Business & Corporate Tax

Corporate Income Tax

Headline Rate

25%

Effective Rate Note

25% main rate; 19% small profits rate (profits ≤£50,000); marginal relief between £50k-£250k

Free Zone / Incentives

Freeports introduced with various incentives

Withholding Taxes

Dividends

Interest

20%

Royalties

20%

VAT / GST

Rate

20%

Note

20% standard VAT rate

Compliance & Substance

Substance Requirements

High - OECD compliant, strict rules

Compliance Friction

High - complex tax system

Notable Regimes

Patent Box
R&D tax relief
Super-deduction ended 2023

OECD Pillar Two (15% global minimum tax)

LiveQDMTT from 31 Dec 2023

Multinational Top-up Tax (MTT) and Domestic Top-up Tax (DTT) in force from accounting periods starting on or after 31 December 2023. UTPR live for periods starting on or after 31 December 2024.

See full implementation tracker

Tax Treaty Network

US treatyYes

UK treatyNo

US totalizationYes

Total treaties~135

Largest treaty network globally. US-UK treaty includes detailed savings clause for US citizens, treaty benefits limitation, and protocol updates. Totalization agreement in force.

See full treaty matrix

Data Sources

GOV.UK — HS266 Foreign Income and Gains (FIG) regime LITRG — FIG regime (tax years from 2025/26)HMRC

Last verified: June 2026. Always check official sources before making a decision.

FAQ

What is the personal income tax rate in United Kingdom?

United Kingdom has a top personal income tax rate of 45%. The tax structure is: Progressive 0-45% (England); Scotland has different bands. See the detailed breakdown above and verify with official sources.

Do I need to pay tax on foreign income in United Kingdom?

United Kingdom uses a worldwide system for foreign income. All UK residents taxed on worldwide income on arising basis from 6 April 2025. Qualifying new residents can elect into the FIG regime for their first 4 years (see special regimes).

What are the residency requirements for United Kingdom?

Tax residency in United Kingdom generally requires 183 days of physical presence. 183 days or automatic overseas tests; statutory residence test applies. Always verify current rules with official sources.

Is there a wealth tax in United Kingdom?

No, United Kingdom does not have a wealth tax. No wealth tax; council tax on property

What is the corporate tax rate in United Kingdom?

The corporate tax rate in United Kingdom is 25%. 25% main rate; 19% small profits rate (profits ≤£50,000); marginal relief between £50k-£250k

US citizen moving to United Kingdom? Read this first.

United Kingdom's top personal rate of 45% means the Foreign Tax Credit (FTC) usually wins over FEIE for US citizens.

•FTC (Form 1116) credits United Kingdom tax against US tax dollar-for-dollar. Because United Kingdom tax exceeds US tax on the same income, you typically owe zero US tax and accumulate carryforward credits (10-year carry).
•Self-employment tax is normally exempted via the US-United Kingdom totalization agreement — pay into one social security system, exempt from the other.
•For earned income near the FEIE cap (~$130k), FEIE is sometimes simpler administratively. Above the cap, FTC strategy almost always wins given United Kingdom's rates.
•United Kingdom residency days threshold: 183. Treaty tie-breaker rules (where applicable) help with double-tax avoidance.

Read the full US-citizen moving-abroad guide

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