Concept
A UK tax resident is normally taxed on foreign income and gains as they arise, unless a specific relief applies. HMRC guidance on tax on foreign income states that UK residents normally pay tax on foreign income, while non-residents do not. From 6 April 2025 the arising basis is the default for all UK residents; keeping funds offshore does not, by itself, defer or remove the charge.
What is in scope
Foreign income includes overseas employment income, foreign dividends, interest, royalties, rental income and pensions. Foreign gains include disposals of non-UK assets, subject to CGT and the offshore fund regime. Cryptoassets are usually held as personal investments, and HMRC says individuals will generally pay CGT on disposals in CRYPTO20050. A foreign broker, company or trustee will not usually have produced UK-ready tax information.
The Self Assessment architecture
SA106 — foreign
Foreign income is normally reported on SA106, which also carries foreign tax credit relief entries.
SA108 — capital gains
Disposals, including offshore fund and crypto disposals, are summarised on SA108.
SA109 — residence and FIG
Residence, split-year and FIG-related claims go on SA109.
The classification test
The analysis asks: is the person UK resident for the tax year; is the item income or capital; is it UK source or foreign source; is the asset UK situs or foreign situs; is a special code applicable; has foreign tax been paid; and is a relief claimed. Crypto adds situs questions because HMRC's CRYPTO22600 links exchange-token location to beneficial-owner residence for CGT.
Consequences
Foreign income and gains can be taxable even if not remitted to the UK. Foreign tax may reduce UK tax through foreign tax credit relief, but it is not automatic. Currency conversions, non-UK tax years, pooled crypto costs, fund equalisation, excess reportable income and withholding tax all affect the UK computation. A non-reporting fund can convert a gain into income taxed at higher rates.
Examples
A UK resident founder selling shares in a non-UK company may have a UK CGT event even if proceeds stay offshore. A UK resident investor in an Irish ETF may need reporting-fund and excess-reportable-income analysis. A crypto investor who never cashes out to GBP can still have taxable disposals through swaps, sales or spending.
Evidence
Evidence includes annual account statements, dividend vouchers, withholding certificates, sale confirmations, acquisition-cost files, exchange-rate methodology, crypto transaction exports, rental accounts, pension statements and foreign tax assessments. The file should let the UK computation be rebuilt from source documents, and should reconcile with bank KYC and source-of-funds records.
Planning
Planning is classification before the event: whether income is employment, investment, trust, company or fund income; whether a disposal is within CGT or the offshore income gains regime; whether FIG is available; and whether foreign taxes can be credited in the UK. Before residence begins, review fund status, cost basis, embedded gains, crypto records and foreign tax timing.
Q&A
Is foreign income taxable only when brought to the UK
For current post-6 April 2025 UK residents, no. The normal position is arising-basis taxation unless a specific relief, such as FIG or a transitional remittance-basis rule, applies.
Which Self Assessment pages matter
SA106 for foreign income, SA108 for capital gains, and SA109 for residence, split year and FIG-related claims.
Is crypto foreign income
Usually crypto disposals are capital gains for individuals, but employment receipts, mining, staking or trading can raise income-tax issues. Situs follows beneficial-owner residence in HMRC's view.
Does foreign tax paid automatically cancel UK tax
No. Foreign tax credit relief requires a matching UK taxable item, foreign tax of the right character and a correct claim. It cannot usually exceed the UK tax on the same item.
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