Disclosing overseas income and gains to HMRC

More than a hundred jurisdictions exchange financial account information with HMRC automatically under the Common Reporting Standard. Property registries, banks and payment platforms all feed the picture. When the data shows an overseas account or asset that does not appear on your tax return, HMRC sends a nudge letter asking you to check.

A nudge letter is an invitation, not an assessment. Answering it with a considered disclosure keeps the matter civil and the penalties in the lower ranges; ignoring it usually turns it into a formal enquiry with far less room to negotiate.

A UK resident is taxable on worldwide income and gains. Foreign rental profit is recalculated under UK rules, so UK-basis deductions, the 20% finance cost reducer for residential lets and UK capital versus revenue treatment all apply, converted to sterling, and reported on the foreign pages.

The remittance basis was replaced from April 2025 with a residence-based regime giving new arrivals a four-year exemption for foreign income and gains. Anyone who structured their affairs around the old non-domicile rules should have the position rechecked rather than carried forward on assumption.

Tax paid in the other country is normally credited against the UK liability on the same income, capped at the UK tax due. Where the foreign rate is higher there is no UK repayment; where it is lower you top up to the UK rate. The relevant treaty decides which country has primary taxing rights, and for immovable property that is almost always the country where the property sits.

This is why a disclosure of gross foreign rent often settles for far less than the headline figure suggests, but only if the relief is claimed and evidenced with the foreign assessments.

Offshore disclosures are made through HMRC's digital disclosure service under the Worldwide Disclosure Facility. You notify, then submit the computations, the behaviour analysis and the offer. Offshore penalty rules are stricter than domestic ones, with territory categories, failure-to-correct provisions and a longer assessment window for offshore matters.

Get the residence position, treaty position and behaviour analysis settled before the numbers are filed. Reopening a disclosure to correct a wrong assumption costs more than preparing it once.