A UK non-resident individual (determined under the Statutory Residence Test, FA 2013 Sch 45) is generally taxed only on UK-source income, not on their worldwide income. Common examples of UK-source income for a non-resident include:
UK employment income (for duties performed in the UK)
UK pension income
UK-source interest and dividends
Trading income from a UK trade
Foreign income and gains are outside the scope of UK income tax for a non-resident, subject to specific anti-avoidance rules
As required by HMRC, TaxCalc prepares and compares two alternative tax computations, automatically applying whichever results in the lower total tax liability:
Normal Calculation: Standard UK tax calculation on all worldwide UK-source income, subtracting available personal allowances.
Alternative ITA 2007 s811 Calculation: Personal allowances are denied entirely, and specific categories of "disregarded income" are left out of the taxable total
Under the alternative limit, total liability cannot exceed the sum of:
Amount 1: Income tax already deducted (or treated as deducted/paid) on your disregarded income.
Amount 2: Tax due on any remaining non-disregarded income (such as UK property rental profits or UK employment earnings) calculated without giving a personal allowance.
Full Tax Year Only: This relief only applies if you are non-resident for the entire tax year; it does not apply during split-year arrival or departure.
Disregarded Income Types: Includes UK dividends, most bank/building society interest, and specific investments, but excludes trading income or UK property rental income.
Automatic Application: HMRC systems require this to be computed via Self Assessment, restricting your liability to the lower option if beneficial.