Tax Allowances — what international clients should know

If you live abroad or earn income internationally and have ties to the UK, you need to understand how the UK personal allowance works — and how it changes if your income is high. At Money Tax Smart I help international clients identify when UK allowances apply and when extra tax planning is needed.

The UK standard Personal Allowance is £12,570 (the amount you can earn tax-free in the UK) if you are UK resident. But for those with adjusted net income over £100,000, the allowance is reduced by £1 for every £2 of income above that threshold; if income reaches about £125,140 the allowance drops to zero.
Because many international clients earn income both in the UK and abroad, the loss of allowance may create a higher effective tax rate if you don’t plan ahead. For example: as a UK resident you might have salary and foreign rental income. I can help you model total income, determine when the allowance is lost, and advise on reliefs or timing to manage tax.

If you’re not UK resident, UK tax may only apply to UK-source income (for example UK property rental) and your Personal Allowance might still apply depending on circumstances — we’ll review your residence status, worldwide income, and how the UK allowance interacts with foreign tax systems.

How I can Money Tax Smart Help :  We can review your income streams, model the allowance claw-back for high earners, advise on timing income or using reliefs (such as pension contributions, charitable giving) to reduce tax. Get in touch today. Contact-Us