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UK Tax Changes in 2025: What Expats Need to Know
Expert Insights
The UK’s tax system, known for its complexity and frequent updates, is set to undergo significant changes in 2025.

These adjustments will impact expatriates living in the UK or planning to move there, particularly in areas such as income tax rates, property ownership, and tax relief schemes. Staying informed is essential for effective financial planning and compliance.

This article outlines the key tax updates for expatriates in the UK for 2025 and provides strategies to adapt to the new regulations.
Why Investors Choose Bali Real Estate
Key Taxes in the UK
The main taxes include:
  • Income Tax
  • Value Added Tax (VAT)
  • Corporate Tax
Tax Residency Status
Your residency status determines your tax obligations:
  • Residents are individuals who spend 183 days or more in the UK during the tax year (April 6 to April 5). Residency can also depend on having your main home or job in the UK.
  • Non-Domiciled Residents (Non-Doms) are individuals who reside in the UK but do not treat it as their permanent home.
Non-doms enjoy special tax advantages, such as being taxed only on UK-sourced income and capital gains for the first 15 years of their residency, provided their offshore income remains outside the UK.
2025 UK Tax Updates
Income Tax Changes
The highest income tax rate will increase to 45% for individuals earning over £50 million annually.
For non-domiciled residents, offshore income and capital gains will be tax-exempt for the first four years of residency, regardless of whether the income is remitted to the UK.

Property Tax Updates
Capital Gains Tax (CGT) on property owned by non-residents will rise to 28% for gains exceeding £31,865, and 18% for smaller gains.

Temporary Tax Reliefs for Expats
Non-residents can remit foreign income earned before April 2025 to the UK under the Temporary Repatriation Mechanism and pay a reduced tax rate of 12%.
Impact on Expats
Tax Planning
The higher tax rates and stricter regulations will necessitate more careful planning to minimize tax liabilities.

Real Estate Investments
Changes in property taxation might deter foreign investors, making UK real estate less appealing.
How to Prepare for the 2025 UK Tax Changes
Seek Expert Advice
Consult tax specialists or legal advisors to understand how the new rules affect your situation. They can provide tailored strategies to optimize your tax obligations.
Stay Updated
Regularly check the HMRC website for guidance on the new tax laws and deadlines.
Optimize Tax Structures
Explore ways to restructure assets, leverage double taxation treaties, or diversify investments in low-tax jurisdictions.
Key Rules for Non-Residents and Expats
Residency and Tax Obligations
  • Residents: Must declare global income and are eligible for tax reliefs under double taxation agreements.
  • Non-Residents: Pay tax only on UK-sourced income, such as property rental or dividends from UK companies. Maintaining non-residency requires careful tracking of time spent in the UK.

Student and Work Visas
  • Students: May be exempt from tax on foreign income but must pay tax on UK earnings.
  • Work Visa Holders: Pay tax on all UK income, similar to UK citizens, and may need to file a self-assessment tax return.
Key Rules for Non-Residents and Expats
Self-Assessment Tax Returns
All individuals earning income in the UK must file a Self-Assessment Tax Return (SA100).

Key Deadlines
  • Filing: January 31 of the year following the tax year.
  • Payment: Taxes must also be paid by January 31. Late filing incurs penalties starting at £100.

Additional Forms
  • SA105 for rental income
  • SA102 for employment income
  • SA108 for capital gains
Temporary Tax Measures for 2025–2026
  • Foreign income will benefit from a 50% taxable reduction for those transitioning away from the remittance basis.
  • Offshore assets repatriated to the UK will be taxed at a reduced rate of 12% under the Temporary Repatriation Mechanism.
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The 2025 tax reforms in the UK represent a significant shift for expatriates, especially concerning income, property ownership, and tax relief mechanisms. Staying informed and planning ahead are critical for minimizing liabilities and navigating the changes effectively.

For expert guidance on UK taxation and financial planning, contact Globe Invest today for tailored solutions.
Ivan Barkhatov, Director of Investment Advising Department
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