UK expat tax rules Archives - Expat Mortgages UK

Dual Residency Explained: Can You Be A Tax Resident in Two Countries at Once?

July 14, 2025

Understanding the concept of tax residency is essential for migrants with international finances. Whether you plan to live, invest or purchase property abroad including a country like the UK, it’s important to know the rules around dual tax residency. This knowledge is especially relevant for expats managing overseas income, property investments and mortgage applications.

As the UK’s leading Expat Mortgage Broker, we regularly assist clients who are considered to be tax residents in more than one country. In this blog, we’ll explain exactly what dual residency means, how it occurs and how it can impact your UK mortgage application and financial plans as an expat.

What Is Dual Tax Residency?

Dual tax residency takes place when a person meets the standards to be considered a tax resident in two or more nations simultaneously. This can happen for various reasons, such as:

Living in more than one country during a whole tax year
Earning income in more than one jurisdiction
Owning residential property in two countries
Living in a country for a specific number of days
Keeping a permanent home or having family ties in a number of countries

How Does Dual Residency Affect Expats?

For expats, particularly ones investing in property or applying for an expat buy-to-let mortgage UK, dual residency can complicate tax reporting and financial obligations. You may be required to:

File tax returns in both countries
Report global earnings in each jurisdiction
Pay tax in both nations, except when relief is available
Navigate double taxation agreements (DTAs)

This can impact not only your disposable income but also your capacity to meet certain lending criteria when you’re applying for expat BTL mortgages.

What Is a Double Taxation Agreement?

Fortunately, many nations including the UK have Double Taxation Agreements (DTAs) in place. These treaties ensure that people are not taxed twice on the same income.

If you’re deemed to be a resident in more than one country, the DTA regularly includes a tie-breaker rule that uses certain criteria to decide which one has priority when it comes to your tax liabilities. These standards usually consist of:

The location of your permanent residence
Where your main interests are, including your family, business and financial interests
Your main place of residence
Your nationality

Finding out how a DTA applies to you can help you structure your earnings and investments effectively, especially while looking for suitable expat mortgage lenders UK, who may help you manage your global financial profile.

How Dual Residency Impacts Expat Mortgage Applications

If you are considered to be a dual resident, this can affect how lenders view your application. UK expat mortgage lenders commonly need a clear understanding of your tax position when:

You have earnings from abroad
You’re using services outside the United Kingdom
You’re purchasing a property as an investment

Whether you’re applying for a buy-to-let mortgage UK expat product or a residential mortgage, creditors will take a close look at your income balance, tax liabilities and capacity to repay.

Steps to Take if You Are a Dual Tax Resident

To minimise complications and keep yourself compliant, here are the key steps you should take if you’re a dual resident, or suspect that you are:

1. Get Professional Tax Advice

Tax laws can be highly complex and specific to each country. Get help from a worldwide tax advisor who can assess your situation and give you recommendations on DTAs and complying with your responsibilities.

2. Disclose All Income Accurately

When disclosing information about your income for a mortgage application, be completely transparent about your earnings. This will help lenders to determine affordability and avoid delays with your application.

3. Choose the Right Lender

Not all lenders are set up to deal with complex expat mortgage applications. Work with experts like Expat Mortgages UK, who understand the nuances of expat BTL mortgages and can direct you to the most suitable products.

4. Keep Your Documents Organised

If you’re a dual resident, you may need to provide extra documentation such as tax returns from both international locations, proof of address and bank statements. Good organisation will make the application process simpler.

Final Thoughts

Many people are considered to be tax residents in multiple countries at the same time. While this can sound complicated, with the proper help, you can stay compliant, avoid double taxation and still achieve your financial goals, including property investment in the UK.

At Expat Mortgages UK, we help expats navigate each stage of their mortgage journey confidently. If you’re a dual tax resident trying to secure a UK mortgage, speak to our team today for professional, problem-free recommendations.

For reliable professional expat mortgage recommendations, get in touch with Expat Mortgage UK now.

Ready to Simplify Your Dual Tax Residency and Mortgage Plans?

Let our experts at Expat Mortgages UK help you navigate international tax complexities and secure the right expat mortgage for you. Contact us today for trusted, tailored advice you can believe in.

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.