New UK Tax Year 2026/27: What British Expats Need to Know
The UK tax year ended on 5 April 2026. A new one has now begun - and for British expats, a tax year change is never just an administrative milestone. It is a prompt to review your position, take stock of what has reset, and plan ahead before the year gathers momentum.
Whether you live overseas full-time, split your time between the UK and another country, or have recently made the move abroad, the start of the 2026/27 tax year brings both fresh opportunities and some ongoing pressures worth understanding.
What reset on 6 April
Each new tax year brings a clean slate on several key allowances. These are not carried forward - unused amounts from 2025/26 are now gone. For the year ahead, the following apply:
ISA allowance: The annual ISA allowance remains £20,000 for 2026/27. While most expats living abroad cannot contribute to a new ISA while non-UK resident, those who moved overseas during the 2025/26 tax year may retain some ability to contribute depending on timing. Existing ISAs held before leaving the UK continue to grow tax-free in the UK regardless of where you live, but that growth is more than likely taxable in your country of residence.
Pension annual allowance: The annual allowance for pension contributions remains £60,000. Unused allowance from the past three tax years can still be carried forward, but the 2022/23 allowance - the oldest eligible year - has now expired. If you have been considering making a larger pension contribution to use that historic allowance, that window has now closed.
Capital Gains Tax exemption: The annual CGT exemption is £3,000 for 2026/27. It resets fully on 6 April and cannot be rolled over. For expats with UK-based assets - property, shares or investments - this is relevant when planning the timing of any disposals.
IHT annual gifting exemption: You can gift £3,000 per tax year free of inheritance tax. If you did not use last year's exemption, you had the ability to carry it forward for one year - meaning a combined £6,000 could have been gifted before 5 April. That combined window is now closed. The 2026/27 exemption of £3,000 is now available fresh.
What has changed entering 2026/27
Beyond the annual resets, the 2026/27 tax year arrives in the context of a UK tax landscape that has been tightening steadily. Several changes from recent Budgets continue to take effect.
Income tax thresholds remain frozen until 2030. This means that even modest increases in income - from UK rental properties, pension drawdown or savings interest - can push individuals into higher tax bands without any change in headline rates. If you have UK-sourced income, the real-terms tax burden on that income is likely to increase year on year.
Tax on UK savings interest, dividends and rental income increased by two percentage points in the 2025 Budget. For expats with UK bank accounts, investment portfolios or property, this may reduce the net return on those assets, depending on the country in which you are resident.
For those who left the UK in 2025/26: If you departed the UK partway through the last tax year, your residency status for that year matters enormously. The UK's Statutory Residence Test determines the date from which you are treated as non-resident - and that affects your exposure to UK income tax, CGT and potentially IHT for the entire year. If you have not reviewed your residency position formally, now is the time.
The non-dom changes: where things stand
The abolition of the UK's non-domicile regime, which took effect from April 2025, continues to reshape the landscape for internationally mobile individuals. The replacement framework - broadly a four-year foreign income and gains exemption for new arrivals, followed by full UK taxation - is now embedded in the system.
For long-term non-doms who were relying on the remittance basis to shelter overseas income and gains, the adjustment required is significant. If you have UK domicile status and have not yet reviewed how this change affects your position, that conversation is overdue.
Pensions: a priority at the start of the year
The start of a new tax year is one of the best moments to review your pension position. For UK expats, this is particularly true.
If you have a UK pension you have not reviewed in some time, the questions worth asking are straightforward: Is the investment strategy still appropriate? Are you drawing at the right time? Have the recent changes to pension taxation - particularly around pension funds and inheritance tax, which are set to take effect in 2027 - been factored into your estate planning?
For those considering a pension transfer - whether to a Qualifying Recognised Overseas Pension Scheme (QROPS) or otherwise - the transfer process itself requires careful timing and specialist advice. Transfers made without proper structuring can trigger significant HMRC tax charges.
Our UK Pension Transfer Test is a useful starting point if you are unsure whether a transfer is right for your situation.
If you are thinking about leaving the UK
The start of a new tax year is also a natural moment to plan ahead if relocation is on your radar. Many of the decisions involved - when to trigger asset disposals, how to time a pension lump sum, when to formally establish non-residence - are heavily dependent on which tax year they fall in.
Getting those decisions right can make a material difference to your lifetime tax position. Getting them in the wrong order can be costly and, in some cases, irreversible.
We have recently seen a significant increase in enquiries from UK-based individuals and families exploring a move to Europe - particularly to countries offering favourable tax treatment for incoming residents. If that describes your situation, a conversation with one of our advisors at the beginning of the tax year, rather than the end, gives you far more time to plan properly.
A practical prompt
The beginning of a tax year is not a deadline - but it is a useful prompt. A short review of your current position against the questions below is a good use of an hour:
• Have you reviewed how frozen UK tax thresholds affect your UK-sourced income?
• Do you have a pension you have not looked at recently?
• Are you aware of how your UK property or investments are affected by recent tax changes?
• If you left the UK recently, has your residency status been formally assessed?
• If you are planning to leave, have you looked at the sequencing of your financial decisions?
If any of those questions prompt uncertainty, feel free to get in touch with me directly. I'd be happy to talk it through.
Frequently Asked Questions
Most expats living abroad cannot contribute to a new ISA while non-UK resident. However, existing ISAs held before leaving the UK continue to grow tax-free in the UK. Any growth may be taxable in your country of residence.
The annual CGT exemption is £3,000 for 2026/27. It cannot be rolled over to the following tax year, so timing of any disposals matters.
The non-domicile regime was abolished from April 2025. It has been replaced with a four-year foreign income and gains exemption for new UK arrivals, after which full UK taxation applies.
The annual allowance remains £60,000. Unused allowance from the past three years can be carried forward, but the 2022/23 allowance has now expired.
Important Information
This article is provided for general information purposes only and does not constitute financial, tax or legal advice. The information reflects our understanding of current UK legislation and HMRC practice at the time of writing, which may change in the future.
Tax treatment depends on individual circumstances, including residence and domicile. Individuals should not take action based on this article without seeking personalised professional advice.
This article has been produced and published on behalf of Forth Capital Advisers Limited, Forth Capital Geneve Sarl, Forth Capital (Hong Kong) Limited, Forth Capital (USA) LLC, Forth Capital (Australia) Pty Ltd and Forth Capital (Europe) Limited.
Last updated 14 April 2026
