Tax is a complicated subject for many people and for those who are receiving some form of income in more than one country, it can be even more of a headache.

This is a question that we are commonly asked, particularly because we have many clients who are expatriates and are receiving income in their home country and also in their new country of residence. It leaves many people confused as to how they will be taxed and under the laws of which country.

To explain things as simple as possible, a Double Taxation Agreement is a ‘treaty’ between two or more countries to ensure that the individual avoids paying tax twice, in both jurisdictions, on the same income.

For UK expatriates, you can view tax treaties in place with the United Kingdom here.

Double Taxation Agreements are in place to ensure that the taxing rights of income are only liable in your country of residence and not in both countries you are receiving income from.

If you have moved out of the UK permanently but are receiving income from your UK pension if your new country of residence has a double taxation agreement in place with the UK, then you may not be liable to UK income tax on the income you are receiving.  However, this is not guaranteed, and you would need to apply for to HMRC for a no-tax (NT) code. If the NT code is granted, the taxing rights may be shifted to your new country of residence and assessed in line with their tax laws.