Digital Nomad Visas: Opportunities and Limitations for British Expats

Remote work has fundamentally changed the lifestyle possibilities for globally mobile professionals. For British nationals, digital nomad visas have opened new opportunities to live and work legally in a range of international destinations, often with attractive tax conditions and a high quality of life.

The impact goes beyond seasoned expats. Many individuals who previously couldn’t consider international mobility, whether due to job constraints, location dependency or economic limitations, are now able to explore a borderless working life. However, beneath the appeal of this freedom lie financial and legal complexities.

If you're a British expat considering, or already using, a digital nomad visa, it's important to understand how this temporary residency status could affect your broader financial position. It may have implications for your UK tax residency, state pension entitlement and exposure to inheritance tax under the new rules introduced in April 2025. With the right strategic planning, however, you can navigate these challenges and take full advantage of the opportunities.

Income Requirements (as of July 2025)

Income thresholds vary by country. The figures below apply to individual applicants only. If you are applying with a partner or dependants, higher income levels and additional documentation may be required.

• Spain: Applicants must earn approximately €2,760 per month, based on 200% of Spain’s minimum wage as of early 2025. Higher thresholds typically apply if you are including dependants.

• UAE (Dubai): Remote workers must demonstrate a monthly income of at least USD 3,500, earned from an employer or business registered outside the UAE. Applicants must also provide evidence of a valid employment contract or business ownership.

• Portugal: The former Non-Habitual Resident (NHR) tax regime closed to new applicants at the end of 2023. A new scheme, known as IFICI [Incentivo Fiscal à Investigação Científica e Inovação], was introduced in 2024 and is limited to professionals working in scientific research, innovation, or academia. Most digital nomads arriving after this date are subject to standard Portuguese income tax rates, currently ranging from 14.5% to 48%.

Digital Nomad Visas typically provide residency for a period of six to 24 months and can often be renewed. In addition to offering a legal pathway to international living and lifestyle flexibility, they may provide tax benefits depending on the rules in the host country and your personal tax residency.

Information in this section is accurate to the best of our knowledge as of July 2025.

Tax Incentives: What You Need to Know

One of the main attractions of Digital Nomad Visas is the possibility of benefiting from low or even zero local income tax. However, the real-world advantage depends on the host country’s tax framework and your broader global tax obligations, especially if you are still considered UK tax resident.

Common tax considerations include:

• Non-resident tax status: Some countries treat digital nomads as non-residents for tax purposes, applying flat or zero tax rates on foreign income. This can be highly advantageous, but it's essential to understand the residency rules and how they affect liability.

• Double Taxation Treaties (DTTs): The UK has DTTs with many jurisdictions, which aim to prevent income from being taxed in both the UK and your host country. However, not all countries offering Digital Nomad Visas have comprehensive treaties, so relief may be partial or unavailable.

• UK Tax Residency: If you continue to meet the criteria under the UK’s Statutory Residence Test, you may remain liable for UK tax on your global income, regardless of the tax regime in your host country. This could diminish the expected benefit of relocating under a Digital Nomad Visa and requires careful monitoring of your travel days and ties to the UK.

In short, while the headline tax rates offered by many digital nomad destinations appear attractive, the real outcome depends on your full cross-border tax profile. Strategic financial planning is essential to optimise your position and avoid unexpected tax exposure.

UK IHT Rule Now in Effect: What It Means

“Long-Term UK Resident” Rule

As of 6 April 2025, the UK has implemented a significant change in how inheritance tax (IHT) applies to British nationals. Under the new rules, individuals are brought within the scope of UK IHT if they have been UK resident for 10 of the previous 20 tax years, regardless of whether they currently live abroad.

• Non-UK residents who maintain non-residency for 10 consecutive tax years may see their non-UK assets fall outside the UK IHT net.

• British digital nomads who regularly return to the UK or maintain strong UK ties risk inadvertently triggering this long-term residency threshold.

Key consideration: This significant change to the UK IHT regime represents an important opportunity to reassess your current and future IHT exposure. With strategic planning, British expats may be able to significantly reduce their future tax liabilities on global assets.

Making the Complex Simple for Expats Worldwide

At Forth Capital, we specialise in helping high-net-worth (HNW) internationally mobile executives build, optimise, and protect their wealth - before, during and after a move abroad. From optimising your tax position and managing currency exposure, to asset management and estate planning, we provide clear, transparent, personalised advice to help you ensure that your wealth is structured tax-efficiently and that costly mistakes are avoided.

We work closely with clients facing global financial challenges, offering joined-up solutions that align your investments and assets with your long-term goals. The aim is simple: effective, integrated planning that works wherever life takes you.

If you’d like to schedule an initial consultation with me to discuss your financial planning, wealth management or pensions please get in touch today.

Niamh Aitken DipPFS
International Financial Planner

As a dual-qualified and dual-licenced Financial Planner, I offer tailored financial planning services to international private clients. I help them understand their options, optimise their UK pensions and investments, and create a robust financial plan for their future lives. If you want to discuss your financial planning needs, please contact me here.