Tax mistakes are expensive at the best of times. For internationally mobile individuals, with income sources in multiple countries, assets in multiple jurisdictions, and obligations to multiple tax authorities, the cost of getting things wrong can run to tens of thousands of pounds — sometimes more.
What follows is not a complete list. But these five mistakes appear with depressing regularity in the situations that come to our attention, and each one is entirely avoidable with proper advice.
Mistake 1: Missing the UK self-assessment deadline as a non-resident
The UK tax year ends on 5 April. Self-assessment returns for that year must be filed online by 31 January of the following year. If you have UK-source income as a non-resident — rental income, UK pension income, UK employment income, director's fees from a UK company — you typically need to file a UK self-assessment return.
The mistake many expats make is assuming that because they live abroad, UK filing obligations no longer apply to them. They are wrong. Non-resident status changes what you are taxed on, not whether you need to file.
HMRC's penalty structure for late returns is automatic and begins from day one. A return filed one day late triggers an initial £100 penalty. Returns more than three months late attract additional daily penalties. Returns more than six months late trigger a further penalty. After 12 months, HMRC can add a penalty of up to 100% of the tax due. For someone with UK rental income who has stopped filing returns and owes several years of tax, the penalty loading alone can be catastrophic.
The fix is simple: register for self-assessment before you leave, or ensure you engage a UK accountant to maintain compliance while abroad. The cost of a good accountant is trivial compared with the penalties for non-compliance.
Mistake 2: Paying double tax on pension income
The UK has a network of Double Taxation Agreements (DTAs) with most countries where UK nationals live in significant numbers. These agreements typically provide that pension income is taxable only in the country of residence, or set out specific rules about where different types of pension income are taxed.
Without actively claiming relief, you may be taxed in both countries simultaneously — once by HMRC (by default, on the assumption you are receiving UK-source pension income) and again by your country of residence (which taxes you on worldwide income as a resident).
The mechanism for claiming double tax relief depends on the specific DTA and the type of pension income. For some pensions, you need to apply to HMRC for a NT (nil tax) code, which instructs the pension payer to pay gross — no UK tax withheld. For others, you claim the foreign tax credit in your country of residence.
Many expats simply receive their pension with UK tax deducted and assume nothing can be done. They leave money on the table year after year. The right approach is to review the DTA with your country of residence and take positive action to claim relief before the first payment arrives.
Mistake 3: Failing to file an NRCGT return within 60 days
If you are a non-UK resident and you sell UK residential property, you must file a Non-Resident Capital Gains Tax (NRCGT) return and pay any CGT due within 60 days of completion. This is not the same as waiting for your annual self-assessment return. The 60-day deadline is separate, specific, and strictly enforced.
Many expats with UK property are not aware of this requirement — or are aware of it but do not appreciate that it applies even if no tax is due (for example, if the gain is within the annual exempt amount, or if losses from other disposals cover the gain).
Penalties for missing the 60-day return are automatic. An initial fixed penalty applies, followed by daily penalties after three months, and then a further fixed penalty after six months. Where there is also unpaid tax, a percentage-based penalty is added on top.
In practice, this means a seller who completes a property sale, banks the proceeds, and assumes they will deal with the tax in their next annual return could receive a penalty notice for several thousand pounds — for a procedural failure, not for evading tax. The fix: instruct your UK property solicitor to alert you to this requirement at the point of sale, and arrange for the return to be filed promptly on completion.
Mistake 4: Not claiming Private Residence Relief on the former main home
If you lived in a property as your main residence before renting it out and eventually selling it, you may be entitled to Private Residence Relief (PPR) on part of the gain. Specifically, the periods during which the property was your main residence are exempt from CGT.
The final period of ownership also qualifies for relief — as of the current rules, this is 9 months before sale, regardless of whether you were living there. For properties that were your main home for many years but have since been rented out, this combination of PPR and the final-period exemption can significantly reduce or eliminate the gain.
The mistake is failing to claim it. PPR is not automatically applied by HMRC — you must claim it, with supporting evidence of when the property was your main residence.
A second common error is failing to keep records of the periods of occupation. HMRC may ask for supporting documentation — utility bills, bank statements, GP registration, electoral roll records — to establish that the property was genuinely your main residence during the period claimed. Investors who do not retain these records in an accessible form find it difficult to support a PPR claim years later.
Mistake 5: Ignoring the 15-of-20-years deemed domicile threshold (now 10 years)
UK domicile is a common law concept based on your permanent home intention, not your tax residency. You acquire a domicile of origin at birth, and changing it requires a positive and permanent intention to make another country your permanent home.
Until relatively recently, many UK nationals who moved abroad believed that doing so freed them from UK inheritance tax. The deemed domicile rules changed this analysis. Under the rules that have applied for some years, individuals who were domiciled in the UK and who were UK tax resident for 15 out of the preceding 20 years were treated as deemed domicile for IHT purposes — meaning UK IHT applies to their worldwide assets.
Following changes confirmed in Budget 2024 and taking effect from April 2025, the threshold for IHT "long-term resident" status (the successor concept to deemed domicile in the IHT context) has been reduced to 10 years of UK tax residence. Individuals who have been UK resident for 10 or more of the last 20 years may now be within the UK IHT net on worldwide assets.
The mistake: many UK nationals who left the UK after a long working career assume that their overseas assets (Dubai property, Spanish villa, US stock portfolio) are outside the UK IHT net. They may be wrong, depending on when they left and how long they were resident before leaving. Even after leaving the UK, there is a "tail" period during which worldwide assets remain within the IHT net — a period that can extend for several years after departure.
This is not a matter to discover on death. The consequences fall on your family. Review your IHT position with a qualified adviser before you assume it does not apply to you.
How to avoid all five
Each of these mistakes shares a common root cause: assuming that moving abroad simplifies your tax position, when in many cases it complicates it. UK tax obligations do not automatically cease on departure. New obligations arise in the country you move to. And the interaction between the two tax systems creates risks that neither set of rules, taken alone, makes obvious.
Working with a qualified international tax adviser — who understands both UK rules and the rules of your country of residence — is the most reliable way to avoid these and other costly errors.
This article is for general information purposes only. UK tax law is complex and changes frequently. Nothing in this article constitutes personal tax advice. Please seek qualified independent tax advice before making any decisions. Global Investments can connect you with experienced international tax specialists — contact us to discuss your situation.
This article is for general information only and does not constitute financial, legal or tax advice. Rules, prices and regulations change; verify current requirements with a qualified adviser before acting.