Declaring foreign income on a tax return

If you are UK resident, foreign income is normally taxable in the UK as it arises, whether or not you bring it here, and it goes on the Foreign supplementary pages (SA106) of your Self Assessment return. Each item is reported in pounds at the exchange rate when it arose, gross of any foreign tax, with the foreign tax shown separately so HMRC can give Foreign Tax Credit Relief. Some foreign income, such as overseas employment, trading and capital gains, belongs on other pages.

What counts as foreign income, and who has to report it?

GOV.UK defines foreign income as anything from outside England, Scotland, Wales and Northern Ireland, and treats the Channel Islands and the Isle of Man as foreign. Residence decides whether it is taxed: non residents do not pay UK tax on foreign income, while UK residents normally do. From 6 April 2025 the remittance basis for non domiciled individuals was replaced. A “qualifying new resident”, meaning someone in one of their first four years of UK residence after at least ten consecutive tax years of non residence, can instead claim relief under the foreign income and gains (FIG) regime on the SA109 pages, and the SA106 notes explain the extra boxes for that claim.

You usually need a return if you are UK resident with foreign income or gains. GOV.UK says you do not need one if your only foreign income is dividends, your total dividends including UK ones are within the £500 dividend allowance, and you have nothing else to report. If you do not normally file, you must register for Self Assessment by 5 October following the tax year in which the income arose; see registering for Self Assessment.

Which income goes on the Foreign pages, and which does not?

The 2026 Foreign notes (for the 2025 to 2026 return) cover interest and other overseas savings income, dividends from foreign companies, overseas pensions and social security benefits, royalties, income from property abroad, income from non resident settlor interested trusts, transfer of assets abroad income and foreign tax paid on gains. They also list what does not go there:

• foreign income of a trade or partnership goes on the Self employment or Partnership pages;
• foreign employment income goes on the Employment pages, with the Foreign pages used only to claim credit for the foreign tax on it;
• gains on overseas assets go on the Capital Gains Tax summary pages, although a credit claim for foreign tax on a gain is made on the Foreign pages and the gain must also appear on SA108;
• pensions from foreign schemes registered in the UK go in the UK pensions section of the main return.

Our overview of Self Assessment supplementary pages explains how these fit together.

How do you convert foreign currency?

The SA106 notes say to convert income into pounds using the exchange rate at the time the income arose, and point to HMRC’s published exchange rates if you are unsure. Two practical consequences follow. First, each dividend or interest credit is converted at its own date rather than at a single year end rate, unless HMRC’s published rates are used as the notes suggest. Second, the foreign tax on that item is converted at the same rate, so the gross income and the tax stay consistent.

You report the full amount even if you did not bring the money to the UK. The only exception is genuinely unremittable income: if exchange controls or a shortage of foreign currency stopped you transferring it, you tick box 1 and give details, and when the restriction ends you convert the income and tax at the rate on that date.

How are the columns filled in?

Savings, dividends, pensions and other foreign income sections use the same six columns:

Column A

The three letter country code from the list in the notes, one row per country. Several sources of the same kind from one country are added together.

Column B

The income in pounds before any foreign tax. If you received a net amount, add the tax back.

Column C

The foreign tax, being the lower of the tax actually withheld and the credit allowed under the treaty.

Column D

Any UK tax or Special Withholding Tax deducted.

Column E

An X if you are claiming Foreign Tax Credit Relief.

Column F

The taxable amount: the column B figure if you claim credit relief, or column B less column C if you do not.

How are foreign dividends and interest taxed?

Foreign interest is savings income and foreign dividends are dividend income, so they share the same allowances and rates as UK equivalents. GOV.UK gives the 2026 to 2027 dividend allowance as £500 and dividend rates above it of 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band; see dividend allowance and tax rates. The Personal Savings Allowance is £1,000 for basic rate taxpayers and £500 for higher rate taxpayers, as explained in our Personal Savings Allowance guide.

Points specific to foreign investments in the notes:

• Include all dividends even if they are under £500, because they affect the rate on other dividends. If no UK tax is due because a dividend falls within the allowance, you cannot claim credit relief on it.
• Distributions from an offshore fund more than 60% invested in interest bearing assets are treated as interest. Excess reported income from a reporting offshore fund is taxable even though you have not received it.
• No credit relief is available for taxed dividends from Antigua, Australia (franked dividends only), Belize, the Cayman Islands, Cyprus, Gambia, Guernsey, the Isle of Man, Jersey, Kiribati, Malaysia, Malta, Montserrat and Singapore.
• Check the dividend and interest articles of the treaty first: some interest is taxable only in the UK, in which case foreign tax should be reclaimed abroad rather than credited.

How does Foreign Tax Credit Relief work?

The notes allow credit relief where you are UK resident, the foreign tax was properly charged under that country’s law (you must have taken reasonable steps, such as filing a foreign return, to claim available local reliefs), the credit does not exceed the UK tax on the same income, no FIG regime claim covers that income, and any treaty limit is respected. If a treaty gives the other country no taxing right, you cannot claim credit and must reclaim the tax there, usually with a certificate of residence.

HMRC’s helpsheet HS263 explains the calculation. The credit is the lower of the foreign tax (or the treaty amount) and the UK tax on that item, worked out as the difference between your UK liability with and without the item. Each source is calculated separately rather than pooled, and you may order your income and allowances in the way that gives the largest credit. Deduction relief, which reduces the foreign income by the foreign tax instead, is an alternative that usually helps only when there is no UK liability. You do not have to work out the credit yourself: if you complete the columns and file on time, HMRC will calculate it, and box 2 is only for people who do.

What does this look like in practice?

Illustration only. A basic rate taxpayer receives a foreign dividend worth £1,000 after converting at the rate on the payment date, from which £150 of foreign tax was withheld, and the treaty dividend rate is 15%. She enters £1,000 in column B, £150 in column C, an X in column E and £1,000 in column F. If her other dividends already use the £500 allowance, the UK tax on this dividend at 10.75% is £107.50, so her credit is limited to £107.50 and the rest of the foreign tax is simply lost. A treaty rate above the UK rate means a credit claim cannot remove all the double taxation.

What are the common mistakes?

• Entering the net amount received in column B, which understates income.
• Claiming credit for foreign tax above the treaty rate instead of reclaiming the excess abroad.
• Putting foreign salary or trading profits on the Foreign pages rather than the Employment or Self employment pages.
• Leaving out small dividends because they are under the allowance.
• Assuming foreign bank interest is reported to HMRC in the same way as UK interest and not declaring it.

If foreign income has been missed in earlier years, HMRC’s Worldwide Disclosure Facility is the route for putting it right.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

Related Accountapedia entries

• Selling a property abroad: UK CGT and foreign tax
• Foreign pensions received by UK residents
• Do I need to declare dividends to HMRC
• The four year foreign income and gains regime
• Tax on director fees from an overseas company
• The Common Reporting Standard and offshore data

See also: YouTuber and Streamer Income Tax in the UK.

Sources

• GOV.UK: Tax foreign income
• GOV.UK: Paying tax
• GOV.UK: Self assessment foreign sa106
• GOV.UK: Tax on dividends
• GOV.UK: Apply tax free interest on savings
• GOV.UK: Relief for foreign tax paid 2026 hs263

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.