Last updated: 16 October 2026
What should you do if HMRC asks about money held overseas?
Take the letter seriously and reply by the deadline. HMRC receives data on accounts held abroad from over 100 countries under the Common Reporting Standard. If you’re UK resident, foreign interest, dividends, rent and gains are generally taxable in the UK. If everything has been declared, reply to confirm that. If not, use the Worldwide Disclosure Facility to tell HMRC about the income and pay what’s due, as this leads to lower penalties than waiting for an inquiry.
Common letters
- Nudge letter: says HMRC has information about your overseas assets and asks you to check your returns
- Certificate of Tax Position: asks you to sign confirming your affairs are correct
- Inquiry or information notice: a formal check, with penalties for not complying
Steps to take
- Collect bank statements and details of the overseas accounts.
2. Work out whether income or gains were taxable in the UK.
3. Check whether tax was paid abroad and if a double tax treaty applies.
4. Reply, disclosing anything missing through the Worldwide Disclosure Facility.
5. Pay the tax, interest and penalties.
Foreign income since April 2025
The remittance basis was replaced from 6 April 2025 by the foreign income and gains regime. People in their first four years of UK residence (after 10 years abroad) can claim relief from UK tax on foreign income and gains. Others pay UK tax on worldwide income as it arises.
How far back HMRC can go
| Behaviour | Time limit |
| Innocent error | 4 years |
| Careless (UK income) | 6 years |
| Careless or innocent (offshore income, from 2013/14) | Up to 12 years |
| Deliberate or failing to notify | 20 years |
Penalties
Penalties for offshore income can be up to 200% of the tax, depending on the country and behaviour. A voluntary disclosure greatly reduces them.
Example
Priya, UK resident, has a savings account in India earning £2,000 a year in interest that she never declared. She receives a nudge letter in 2026. She discloses six years of interest through the Worldwide Disclosure Facility, claims credit for Indian tax deducted, and pays the remaining UK tax plus interest and a reduced penalty.
Common mistakes
- Ignoring the letter
- Signing a certificate that isn’t true
- Forgetting to claim foreign tax credits
- Disclosing only some years
Records to keep
Keep foreign bank statements, tax certificates from the overseas country and correspondence with HMRC.
Double tax relief
If the overseas country taxed the income first, you can usually claim foreign tax credit relief in your UK return, up to the UK tax on the same income. Check the double tax treaty for the maximum rate the other country should withhold, as any excess must be reclaimed from that country rather than from HMRC.
Frequently asked questions
Do I need to declare a foreign account with no income?
Not the account itself, but any income or gains from it.
Is money I took abroad taxable?
Not the capital itself, only income and gains.
Can I get help with the disclosure?
Yes, an accountant can calculate and submit it.
What if I was non-resident?
Foreign income while non-resident isn’t usually taxable in the UK.
Currency conversion
Convert foreign income into sterling using HMRC exchange rates or the rate on the day received, and use the same method consistently.
Related: offshore investments and IHT, disclosing undeclared income and overseas rentals.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with overseas income disclosure help. See our tax refund 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 16 October 2026. It is not personal advice, so speak to an accountant about your own situation.
