expat tax advice UK Archives - Expat Mortgages UK

Can Expats Still Open a UK ISA in 2025? And Should They?

July 28, 2025

In 2025, many British expats are re-evaluating their financial strategies, especially when it comes to efficiently saving on UK taxes. One of the most common questions we receive at Expat Mortgages UK is whether expats can keep their UK ISAs (Individual Savings Accounts) and whether they should do this. What’s right for you will depend on your tax residency status, financial goals and how ISAs compare to other investment options.

So, what are the possibilities and what makes sense for expats regarding ISAs in 2025?

What is a UK ISA?

The Individual Savings Account (ISA) is a UK savings and investment option that lets individuals grow their money tax-free. This means that no tax is paid on interest, dividends, or capital gains. During the 2025/26 tax year, individuals can contribute up to £20,000 across all types of ISAs combined, including Cash ISAs, Stocks and Shares ISAs, Lifetime ISAs and Innovative Finance ISAs.

ISAs are a popular tool among UK residents who want to build savings tax-free and help achieve long-term financial goals like buying a home or planning for retirement.

Are Expats Able to Open a UK ISA in 2025?

For tax purposes, you must be a UK resident to open a new ISA or make contributions to an existing one. Once you become a non-resident, which means you live abroad and are no longer subject to UK tax rules, you won’t be able to make further payments into your ISA. However, you don’t have to close your ISA. You can keep it open, and any interest or returns will still be tax-free in the UK.

This rule applies regardless of your citizenship. Even if you hold a British passport, what’s important is whether you are currently considered a UK tax resident.

What Happens to Existing ISAs When You Move Abroad?

If you opened an ISA before you left the United Kingdom, you can still keep it open and benefit from tax-free growth. However, you need to stop contributing to it from the date your UK tax residency ends.

Your ISA account can remain active, with your funds managed by your chosen provider. You will also continue to enjoy the UK’s tax benefits on the account. However, the country where you reside may apply its own tax rules to your ISA, so it’s important to consult a qualified tax advisor to avoid the risk of double taxation.

Should Expats Consider Opening a UK ISA Before Moving Abroad?

If you’re planning to relocate but will still be considered a UK tax resident, it’s wise to maximise your ISA contributions before your status changes. By contributing up to the full £20,000 allowance in the tax year prior to leaving the UK, you can secure the tax advantages, allowing your investments to become free from future UK tax liabilities.

This strategy is especially beneficial for high-earning professionals who expect to work abroad but want to maintain UK-based assets.

Alternatives to ISAs for British Expats

While ISAs are restricted for non-residents, other investment alternatives may be suitable for UK expats, particularly individuals who still have interests back home. These can include UK expat mortgages or asset investments.

1. UK Property Investment Through Buy-to-Let Mortgages

Buy-to-let mortgage UK expat options are becoming increasingly popular amongst expats who want to maintain a financial foothold in the UK. These investments can generate passive income, the chance of capital appreciation and can be funded through competitive expat mortgage products from across the whole UK market.

2. International Savings Accounts

Some international banks provide financial savings accounts designed for expats, which give you high interest rates and can provide tax-efficient returns, depending on your jurisdiction.

3. Offshore Investment Bonds

For long-term savings, offshore bonds provide a tax-efficient structure and are especially appealing to individuals with complex residency situations.

Conclusion: Is a UK ISA a Good Investment for Expats?

While ISAs are an excellent savings vehicle for UK residents, tax residency rules limit their benefits for expats. However, if you are currently in the UK but plan to travel abroad soon, it’s a good idea to maximise your contributions before your residency status changes. If you already live overseas, you can still explore other investment options, such as purchasing property in the UK or obtaining a buy-to-let mortgage as an expatriate.

Whatever you decide, Expat Mortgage UK will guide you through 2025 and beyond to introduce you to the best opportunities and responsible financial alternatives.

Need Help Making the Right Investment Decision as an Expat?

Speak to the experts at Expat Mortgages UK if you’re looking for specialist help in making investment decisions as an expat. Whether you’re looking to invest in UK property, explore buy-to-let mortgage options or protect your financial future abroad, we’re here to help. Contact us now for trusted, personalised guidance for your specific needs.

Tax Deductions Expats Can (and Can’t) Claim on UK Rental Mortgages

June 16, 2025

If you’re an overseas property owner in the UK, it’s crucial to learn about the relationship between rental revenue and tax. Mortgage-related tax reduction affects your returns regardless of your nationality, which means this information is relevant to both British expats and foreign investors who are currently living overseas. However, the rules around what you can and cannot deduct have recently changed.

In this article, we’ll look at common traps for expat landlords, interest relief and permitted deductions.

What Is an Expat Buy-to-Let Mortgage?

Designed for non-residents who want to rent out UK properties, an expat buy to let mortgage UK often comes with more stringent requirements and higher interest rates. Many lenders will look at revenue in overseas currencies and require a solid credit history. Although these products offer good investment opportunities, expats should think carefully about the tax laws linked to rental revenue before they go ahead.

Your property cash flow can be significantly affected by the type of mortgage you choose, so careful planning and consideration is essential. Engaging a specialist expat mortgage broker with many years of experience working with expats will certainly make the process much smoother.

Navigating Tax Deductible Interest for Expats

Some landlords were able to deduct pre-tax mortgage interest from their rental income until April 2020. Nowadays however, things are different. Expats using expat mortgage UK buy-to-let loans are no longer entitled to a full interest exemption. Instead, they can receive a mortgage interest tax credit fixed at 20%.

Additionally, higher rate taxpayers now pay more tax on rental income than they did in the past and this rule applies regardless of where the landlord lives. Expats should also be aware that mortgage interest relief only applies to residential property lettings. Commercial properties are subject to fewer restrictions.

What Expenses Are Still Allowable?

Although mortgage interest relief is now limited, many other expenses are still tax-deductible. Expats can still deduct:

Letting agent fees
Property maintenance and repairs
Insurance costs
Service charges and ground rent
Accountant’s fees
Council tax (if the landlord pays this whilst the property is vacant)

These deductions apply as long as they are totally and solely for rental use. Personal expenses, which can include renovations rather than repairs, are not deductible. For instance, you can replace a broken boiler, but if you upgrade a kitchen to a high-end model, this will be treated as an improvement. Keeping clear, organised records of all property-related expenses is essential for creating an accurate and compliant tax return.

Traps to Avoid with Mortgage Deductions

Many landlords have fallen into the trap of misinterpreting the 20% tax incentive. Some property owners based overseas incorrectly believe they are entitled to comprehensive interest relief. This error can result in underpayment of taxes and potentially tough HMRC penalties.

Average home mortgage interest rates can also cause problems as the tax incentive remains at 20% even when interest rates climb. Rising interest rates won’t reduce the amount of tax you’re liable to pay. Expats must consider this when planning investments. It’s also very important to differentiate between residential and commercial property restrictions. Generally speaking, a proactive strategy is much more preferable to making last-minute changes when tax is due.

Income Tax and Non-Resident Landlords Scheme

Tenants or letting agents may deduct basic rate tax from rent payments before they pass them on to landlords living abroad. To receive rental income without deductions being made, expats must register with HMRC and meet compliance requirements.

Staying compliant is essential, and failing to do so can result in withheld income and potential penalties. Even when registered under the Non-resident Landlords Scheme, expat landlords still need to submit an annual Self-Assessment tax return to HMRC.

You’re advised to speak to a tax consultant with experience in foreign matters if you own several homes or have a large rental income. Expats must register under the UK’s Non Resident Landlord Scheme (NRLS) run by HMRC to receive gross rental revenue. If you fail to register, you could face reduced income, with tax being withheld from you.

Property Ownership Structures for Expats

Many expats consider buying UK property through a limited company. One advantage is that mortgage interest can be fully deducted as a business expense. However, corporate ownership comes with higher costs and more regulatory responsibilities. What the right choice for you is will depend on your personal tax situation, property value and investment goals.

Getting professional advice is essential before you take this route. For some investors, especially those who are building a property portfolio, the long-term tax benefits can outweigh the added complexity. Buying through a UK limited company enables you to deduct all your mortgage interest. However, the extra compliance, taxes and setup costs mean careful planning and bespoke financial guidance are crucial.

Conclusion

While expat mortgages can generate valuable property income, changing tax laws make professional advice essential. Knowing what mortgage interest is still eligible for relief – and what isn’t – can make all the difference when it comes to profits and penalties. By staying informed and compliant, expats may profit substantially from the UK property market. Accurate records and skilled assistance blended with a systematic strategy can help you maximise your investment. Check with Expat Mortgages UK today.

Thinking of letting your UK property from overseas?

Let’s make sure you’re claiming every deduction you’re entitled to while staying fully HMRC-compliant. Get in touch with Expat Mortgages UK today and let our specialists guide you through your options with confidence and clarity from the UK’s leading Expat Mortgage Broker.