Last updated: 14 October 2026
Do you pay UK tax on overseas rental income even if you don’t bring it to the UK?
Yes, if you’re UK resident. Since 6 April 2025, the remittance basis has been abolished, so UK residents are taxed on worldwide income as it arises, including rent from property abroad, whether or not the money is brought into the UK. The only main exception is the 4-year foreign income and gains (FIG) regime for people who’ve recently arrived after at least 10 years of non-residence. Tax paid in the country where the property is can usually be credited against the UK tax.
Who is taxed on foreign rent
| Your status | UK tax on overseas rent |
| UK resident (most people) | Yes, all of it, as it arises |
| New arrival in your first 4 years, after 10 years non-resident | Can claim FIG relief instead; no UK tax on that income |
| Non-UK resident | No UK tax on overseas rent |
| Previously on the remittance basis, before April 2025 | Old unremitted income may be taxed if brought in later; the Temporary Repatriation Facility offers a reduced rate from 2025/26 to 2027/28 |
Working out the profit
Overseas rental income is calculated in the same way as UK rental profits, but kept as a separate overseas property business. You can deduct:
- letting agent and management fees abroad
- repairs and maintenance
- insurance, and local property taxes
- finance costs, which give a 20% tax credit rather than a deduction
Convert income and expenses to sterling at the exchange rate on the day, or an average rate for the year. Overseas losses can only be set against future overseas property profits.
Foreign tax credit relief
If you pay tax on the rent in the country where the property is, you can usually claim foreign tax credit relief, limited to the UK tax on the same income. A double taxation treaty may set out which country has the first right to tax property income, which is usually the country where the property is.
Example
Sofia, a UK-resident higher-rate taxpayer, lets an apartment in Portugal. In 2026/27, her rental profit is £10,000 in sterling. She pays £2,500 in Portuguese tax. The UK tax due is £4,000 at 40%, and after a £2,500 credit, she pays £1,500 more in the UK. She must report the income on the foreign pages of her Self Assessment return.
Joint owners abroad
If you own the property with a spouse, each of you reports your share of the profit and claims your share of the foreign tax credit.
If you haven’t reported foreign rent
If you’ve had overseas rental income in past years and not declared it, you can use HMRC’s Worldwide Disclosure Facility. Disclosing before HMRC contacts you usually means lower penalties. HMRC receives information from many countries under the Common Reporting Standard.
Frequently asked questions
Do I need to tell HMRC if the rent is small?
Yes, unless the £1,000 property allowance covers it and no other return is needed.
Does the UK property allowance cover foreign rent?
It covers your total property income, UK and overseas.
Can I deduct travel to the property?
Only for genuine business trips.
Are there capital gains on selling abroad?
Yes, UK residents pay CGT on overseas property gains, with credit for foreign tax.
Related: the trip against rental income, disclosing undeclared rental income and foreign inheritance tax rules.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with overseas rental income. See our landlord accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
