Adviser Corner
Think You'll Never Go Back? The Reality of Returning Home for Expats in Europe
Mark Tucker, Senior Financial Adviser at Skybound Wealth Management discusses the reality of returning home for expats in Europe
April 16, 2025
The UK tax year runs on a schedule unlike any other in the world, and with every new cycle, changes to legislation can affect how individuals - especially those living abroad - manage their income, assets, and obligations. As one tax year closed on the 5th of April 2025, with the new one commencing the following day, now is the ideal moment for UK expats to pause and take stock.
For anyone with financial ties to the UK - be it through income, property, or pension arrangements - the end of the tax year brings important updates, new regulations, and the chance to plan more effectively. This year, several changes stand out, from increases in National Insurance to the long-anticipated overhaul of non-domicile tax rules.
Let’s take a closer look at what’s changing, what’s staying, and what you need to do now to stay compliant and financially prepared.
The UK's tax calendar is unique - and for good reason. Its odd dates stem from a quirk of history. Back in 1752, Britain adopted the Gregorian calendar, which required dropping 11 days from the year to align with continental Europe. At the time, the tax year began on the 25th of March (Lady Day). Rather than lose tax revenue due to those 'missing days', the year was extended to the 5th of April. The following day, (6th of April,) became the official start of the new tax year - which is has remained ever since.
While this origin story may seem irrelevant to modern taxpayers, its legacy complicates international planning. UK expats living in countries with standard calendar-year tax cycles must account for this mismatch when aligning filings and cash flows across jurisdictions.
For UK nationals residing abroad, managing tax compliance can be challenging - especially when your home country’s tax calendar differs from the UK. For example:
And if that isn't complicated enough, in South Africa the tax year begins on the 1st of March, meaning every four years its end changes from the 28th to the 29th of February.
These differences make tax planning, declaration of foreign income, and claiming relief under Double Taxation Agreements significantly more complex. If you receive rental income, pensions, dividends, or other taxable UK-linked income, your filing obligations don't disappear with residency. In many cases, they only become more nuanced.
This upcoming tax year introduces some of the most notable policy shifts in recent years - particularly affecting employers, earners, and non-domiciled individuals.
April 2025 sees Employer NICs rise from 13.8% to 15%, placing additional costs on UK businesses. Simultaneously, the threshold for employer NICs drops significantly - from £9,100 to £5,000. This means more employee earnings will be subject to NICs, and payroll costs could increase substantially for companies with a large workforce.
For expats who own UK-based businesses or are paid via UK payroll, this change could have direct implications on how salaries and dividends are structured going forward.
To counterbalance the NIC increase, the government has expanded the Employment Allowance. Previously capped at £5,000, the new threshold allows qualifying employers to claim up to £10,500 per year. Additionally, the prior limit of £100,000 in total employer NICs (which previously disqualified larger SMEs) has been removed - allowing more businesses to access this relief.
For business owners and contractors using UK payroll, this could provide useful offsetting benefits. However, eligibility and impact should be reviewed on a case-by-case basis.
From April 2025, the National Minimum Wage rises to £12.21 per hour. For a full-time worker (35 hours per week), that’s a minimum annual salary of £22,222. After taxes and National Insurance, this would equate to a monthly take-home pay of approximately £1,519.
This change is not just relevant to UK-based employees - it can also affect expats who employ UK staff (e.g., for UK properties or family offices), or those who are transitioning back to UK employment after time abroad.
Council tax bills in England, Scotland, and Wales are projected to rise by 5% or more this year. For homeowners who maintain UK properties while living abroad, this will add another layer of cost to property ownership - particularly when combined with rising utility bills and property maintenance costs.
Perhaps the most significant development is the abolition of the remittance basis from April 2025. Under the old rules, non-doms could shelter foreign income and gains from UK taxation unless and until they were brought into the UK. That’s no longer the case.
A new regime will offer 100% exemption on foreign income and capital gains for the first four years of UK tax residence - but only for individuals who have been non-UK residents for at least 10 consecutive years prior to their return.
If you’re planning a move back to the UK - or if you’ve been relying on remittance basis benefits - this change could significantly alter your tax strategy. Early advice is strongly recommended.
For the 2024/25 tax year, make sure you mark these key dates:
Waiting until January is common - but not advisable. Filing early not only reduces stress, it gives you more time to plan, budget, and claim refunds if eligible.
Many UK expats forget to submit Form SA109, which can result in unnecessary taxation or confusion over your residency status.
This form is essential if you are:
The SA109 form is submitted as part of your Self Assessment tax return - but here’s the catch: HMRC’s online portal does not support it. To file, you have two options:
Given the importance of residency declarations in your overall tax position, it’s worth having this done professionally to avoid mistakes.
If you live in a country with a Double Taxation Agreement (DTA) with the UK, you may be eligible to claim relief on certain types of UK income. This can include rental income, pension payments, or dividends.
To claim these benefits, be sure to:
The January deadline often creates a last-minute scramble - and a stressful one at that. But early filing gives you multiple advantages:
The UK tax landscape is changing - and fast. For expats, the combination of legislative shifts and global financial uncertainty makes this a critical time to review your tax position and plan ahead.
At Skybound Wealth, we work with clients around the world to help simplify complexity and put the right strategies in place. If you’re unsure about your obligations or simply want to take a proactive approach this year, our team is here to help.
To find out more about this topic and more, please fill in the form below to arrange a call back.
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