Originally posted on: 13 January 2026
Updated on: 2 February 2026
Introduction
There is something about the start of a new year that makes big life decisions feel suddenly achievable. A fresh calendar, a bit of space after Christmas, and that long-running idea of moving to the UK starts to feel a bit more real.
For Kiwis and Aussies, the UK move is a familiar path. We see it every year. New jobs, contracting opportunities, lifestyle changes, and often a sense that if it is going to happen, it needs to happen now. What tends to catch people out is not the move itself, but the tax and financial decisions that quietly follow them onto the plane.
By the time many people speak to us, they are already in the UK and asking questions that start with, “I didn’t realise this mattered”, or “I assumed that would still be taxed back home”. Those assumptions can be either time consuming to sort out, or expensive, or both.
The reality is that the UK tax system does not gradually ease you in. Once you become UK tax resident, HMRC’s rules apply in full, often to income and assets you still think of as firmly “back home”. Add in the changes to the non-dom regime, new reporting expectations, and the practical realities of moving countries, and it is easy to see why so many people feel caught on the hop.
So, if 2026 is the year you are planning a move to the UK, this blog is designed as a practical checklist. Not edge cases or obscure planning, but the real-world questions we are asked every week by New Zealanders and Australians making the same transition.
The Big Shift in Tax Residency, What Changed and Why It Matters in 2026
If you are moving to the UK in 2026, there is one change you need to understand early, because it affects almost everything else. The old non-dom rules are gone.
For years, many overseas arrivals relied on the UK’s non-domiciled regime, often without fully understanding it. From April 2025, that system was replaced with a new, residence-based approach. Whether that is good or bad for you depends entirely on your circumstances, but either way, it changes the planning conversation.
At the centre of the new system is something called the FIG regime.
The FIG regime, a four-year “honeymoon” for new arrivals
FIG stands for Foreign Income and Gains. Under the new rules, people who are genuinely new to the UK, broadly meaning they have not been UK tax resident for at least ten consecutive tax years, can claim up to four UK tax years where certain foreign income and gains are not taxed in the UK.
In practical terms, that can mean:
NZ rental income not being taxed in the UK during the FIG period
Australian dividends and investment income being ignored for UK tax
Overseas capital gains falling outside the UK tax net for those four years
For people arriving with significant income or investments still overseas, this can look very attractive. It is often described as a “honeymoon period”, and in the right circumstances, it genuinely can be.
But it is not automatic, and it is not always the right choice.
The trade-off most people miss
Claiming the FIG regime comes with a catch that is easy to overlook. If you claim it, you lose your UK Personal Allowance for that tax year.
The Personal Allowance is the first £12,570 of income that would normally be tax-free. Australians will understand this because a similar thing exists in Australia – but for Kiwis it’s a foreign concept (in the UK your first £12,570 in income earned is 100% tax free). Give that up, and you start paying UK tax from the first pound of UK income.
For contractors and freelancers who plan to earn most of their income in the UK, that trade-off can quickly outweigh the benefit of sheltering foreign income. We regularly see people assume “FIG must be good”, only to discover that opting in actually increases their overall UK tax bill.
This is not a box to tick automatically. It is a calculation.
Residency still comes first, the Statutory Residence Test
One important point that has not changed is how the UK decides whether you are tax resident in the first place. That still comes down to the Statutory Residence Test.
Tax residency is not just about the day you land in the UK. It is based on:
How many days you spend in the UK in a tax year
Whether you work in the UK
Where you have accommodation
What ongoing ties you keep with other countries
It is perfectly possible to think you are “not really resident yet”, while HMRC quietly disagrees.
A practical takeaway
For anyone moving to the UK in 2026, the message is simple. The rules have changed, and the old assumptions no longer apply.
The FIG regime can be powerful, but only in the right circumstances. The loss of the Personal Allowance is a real cost, and the Statutory Residence Test still sets the starting line.
This is one of those areas where getting advice early, ideally before the move, can make a material difference. Once the tax year has ended, your choices narrow very quickly.
For most people, they often cease being a NZ / Aus tax resident on the day they depart, and become UK tax resident on the day they land. But getting your tax residency right is the bedrock to understanding what tax you pay, and where.
Foreign Income, What You Still Have “Back Home”
One of the hardest mental shifts when moving to the UK is accepting that income and investments you still think of as “back home” do not become invisible to HMRC just because you changed countries.
If you are UK tax resident, HMRC generally expects to see your worldwide income. That includes interest, dividends, rental profits, managed funds, and investment income from New Zealand or Australia. Even where the tax outcome is ultimately neutral, the reporting rarely is.
Two changes since April 2025 have made this more important to get right.
The £2,000 foreign income exemption is gone
Until recently, there was a small but useful concession that helped many expats. If your foreign income was under £2,000 a year, you could often ignore it for UK tax purposes.
From April 2025, that exemption disappeared when the non-dom rules were replaced with the new FIG regime.
In practice, this means that the “set-and-forget” approach to overseas savings and investments is no longer an option. Modest interest on a NZ savings account, a handful of Australian dividends, or a small amount of overseas investment income can now push you into UK reporting territory.
For many people, the tax due is minimal or even nil once reliefs are applied. The frustration tends to come from the admin. More records, more exchange rate conversions, and more boxes to complete on a UK tax return.
It is not dramatic, but it is fiddly, and it catches a lot of people by surprise.
Quick win, update your bank interest withholding
If you keep an NZ or Australian savings account, tell your bank you’re now non-resident and UK resident, so they apply the correct non-resident withholding rate (often 10%). Australia is typically 10% when your overseas address is on file, and NZ interest to UK residents is 10% under the treaty, otherwise it may default to 15% or be withheld at resident rates.
A quick email or phone call to your bank before you leave, or shortly after you arrive in the UK, can save a lot of time further down the road.
Double Tax Agreements, no double tax, but still double paperwork
A common assumption we hear is, “If it’s taxed in NZ or Australia, the UK won’t care.”
That is only half right.
The UK has Double Tax Agreements with both New Zealand and Australia. These agreements are designed to stop the same income being taxed twice. They do not, however, remove the obligation to report that income in the UK.
In most cases, the process looks like this:
You report the overseas income on your UK tax return
You calculate the UK tax that would apply
You claim credit for foreign tax already paid, up to the UK amount
The end result is often no additional UK tax, but the reporting still needs to be done properly. HMRC wants to see the figures, even if the final tax bill comes out at zero.
This is where people often fall into trouble. Income is not reported because “it was taxed overseas anyway”, and the problem only surfaces later when HMRC asks questions, sometimes years down the line. These days this is no hyperbole – we have helped dozens of clients correctly report overseas income to the HMRC – going back usually 6 or 12 years.
A practical reality check
If you are moving to the UK in 2026 and you plan to keep bank accounts, investments, or property back home, assume two things from the outset:
You will probably need to report that income in the UK at some point
Good records and clear timelines will save you a lot of stress later
NZ or Australian Rental Property While Living in the UK
Owning a rental property back home while living in the UK is extremely common for Kiwis and Aussies. It is also one of the areas where expectations and reality tend to drift apart.
The short version is this. If you are UK tax resident, your overseas rental property does not stop existing for UK tax purposes. Even though the property sits in New Zealand or Australia, HMRC usually expects to see the numbers.
Where the tax is paid, and where it is reported
Let’s start with the good news. Rental income from a NZ or Australian property is still primarily taxed in the country where the property is located. That does not change just because you move to the UK.
However, if you are UK tax resident, that same rental income usually also needs to be reported in the UK.
This is where the Double Tax Agreement comes in. You typically:
Pay tax in NZ or Australia under local rules
Report the rental profit on your UK tax return
Claim foreign tax credit relief so you are not taxed twice
The practical friction points people do not expect
The difficulty with overseas rental income is rarely the concept. It is the mechanics. There are several recurring pain points we see with new arrivals.
Exchange rates
HMRC requires UK tax returns to be completed in GBP. That means rental income and expenses need to be converted, usually using HMRC’s published exchange rates or a consistent spot rate approach.
Mismatched tax years
The UK tax year runs from 6 April to 5 April. New Zealand and Australia use different year ends. While the NZ year end is “close enough” for UK reporting purposes, Australia is not. This means Australian rental figures often need to be apportioned across periods, rather than lifted straight from an overseas tax return.
Mortgage interest differences
What is deductible overseas is not always deductible in the same way in the UK. The UK has its own rules around interest relief, which can make the property more “profitable” in the eyes of the HMRC, making the tax bill higher.
Depreciation mismatches
This one catches a lot of landlords out. Depreciation that is perfectly normal in New Zealand / Australia is not generally allowable for UK property tax purposes. Using overseas profit figures without adjusting for this can overstate losses or understate profits in the UK.
A realistic way to think about it
If you are moving to the UK in 2026 and keeping a rental property back home, assume that:
The property will stay taxable in NZ or Australia
The income will also need to be reported in the UK once you are resident
The admin will be more involved than before, even if the tax cost does not increase all that much
This is not a reason to sell a property in a hurry. It is a reason to get comfortable with how the UK expects overseas property income to be reported, and to keep clean records from day one.
Selling Assets Back Home, Capital Gains Tax Surprises
For many people, the real tax shock does not come from earning income overseas, but from selling something they have owned for years.
The assumption is usually simple. “If it’s back home, the tax rules back home apply.” Unfortunately, once you are UK tax resident, that is often not the full picture.
Selling a NZ property while UK tax resident
New Zealand does not have a broad, all-encompassing capital gains tax in the way the UK does. That can create a false sense of security for people who have owned property, or shares (yes, those Rocket Lab shares sitting in your Sharesies account), for a long time.
If you sell a NZ property, or sell up your Sharesies investments, while you are UK tax resident, the UK may still have a capital gains tax interest in the sale, even if New Zealand does not charge CGT on it.
From a UK perspective, what matters is:
- you are UK tax resident at the time of sale, and
- there has been a gain when measured under UK rules.
One key point that surprises people is this. The UK does not generally “reset” the cost to market value just because you moved to the UK. In most cases, the gain is calculated from what you originally paid (plus allowable costs), even if that was years ago.
If NZ tax is payable on the sale, for example under the bright-line rules, the UK will often give relief via foreign tax credits so you are not taxed twice, but the UK reporting still needs to be done properly.
This is one of those situations where “no tax back home” does not automatically mean “no tax in the UK”.
Aussies and the exit tax vs UK cost trap
Australian residents are often familiar with the concept of an exit tax, and certainly know all about capital gains tax. When you cease to be an Australian tax resident, certain assets are treated as if they were sold and repurchased at market value.
From an Australian perspective, that resets the tax cost.
The problem is that the UK does not automatically follow that logic.
When you later sell shares or managed funds while UK tax resident, HMRC may look back to the original acquisition cost, not the Australian exit value you have already been taxed on. This can create a mismatch where:
Australia has already taxed a deemed gain on exit
The UK calculates a gain using a different cost base
Relief does not always line up neatly
This is not an edge case. It comes up regularly for Australians who arrive in the UK with established investment portfolios.
Timing really matters
Capital gains tax is an area where timing can make a material difference. Selling an asset shortly before becoming UK tax resident can produce a very different outcome from selling it shortly after.
Once the sale has happened, the tax position is largely fixed. There is very little scope to unwind things afterwards.
A practical takeaway
If you are planning to sell property, shares, or investments back home, and a move to the UK is on the horizon, it is worth pausing before you sign anything.
Understanding how the UK will view the sale, what cost base it will use, and whether relief is available can save a significant amount of tax and a lot of frustration.
This is one of the areas where “we’ll deal with it later” is rarely a good strategy.
Business Structure, Sole Trader vs Limited Company
This is one of the first practical questions we’re asked by Kiwis and Aussies arriving in the UK, especially by those who were happily operating as sole traders back home.
The UK contracting market works a little differently, and while you can operate as a sole trader, it is not the default option in the way it often is in New Zealand or Australia.
Why so many contractors use a UK limited company
For many Kiwi and Aussie contractors, setting up a UK limited company is the standard route, particularly for professional, white-collar contract roles.
There are a few reasons for this.
Tax efficiency
A limited company gives more flexibility over how and when you extract income, typically through a mix of salary and dividends. For many contractors, this can be more tax-efficient than being taxed on all profits personally, as you would be as a sole trader.
Credibility with UK recruiters and clients
In the UK market, recruiters and end-clients are used to dealing with limited companies. In some sectors, being a limited company contractor is simply the expected norm, and operating as a sole trader can limit the opportunities available to you.
That said, a limited company does come with more admin. Accounts, payroll, and compliance obligations are all part of the package. For most longer-term contractors, the trade-off is worth it, but it is not a decision to make blindly.
A quick heads-up on IR35
One concept that often comes as a surprise is IR35.
IR35 is the UK’s set of rules designed to identify “disguised employment”. In simple terms, it looks at whether you are genuinely operating as a business, or whether, in reality, you are working like an employee while being paid through a company.
These rules are often unfamiliar because the UK contracting market talks about IR35 explicitly, and the UK has a very specific status and payroll framework around it. It is not applied in the same way as the contractor rules most Kiwis and Aussies are used to back home.
IR35 affects how you are taxed, not whether you can have a limited company. It is something to be aware of from the outset, particularly when reviewing contracts and working arrangements.
Umbrella companies, the low-admin starting point
For some contractors, especially those on short contracts, in-between roles, or who simply want to minimise admin while they find their feet, an umbrella company can make sense.
Under an umbrella arrangement, you are effectively an employee of the umbrella company. They handle payroll, tax, and compliance, and you are paid a net amount after deductions. It is simple and compliant, but less tax-efficient than running your own limited company.
Many new arrivals use an umbrella company as a temporary stepping stone. It allows you to start working quickly, understand the UK market, and then decide whether setting up a limited company is right for you once things settle.
What about operating as a sole trader in the UK?
Yes, you can operate as a sole trader in the UK, and in the right situation it can be the simplest option, especially if you’re doing short-term projects, smaller jobs, or working directly for overseas clients without UK recruiters in the middle.
The appeal is straightforward. It is quick to set up, admin is lighter than a limited company, and you are taxed on your profits through Self Assessment.
But there are trade-offs:
- All profits are taxed on you personally, whether you withdraw the money or not, so there is less flexibility than a company.
- In many sectors, you’ll find it almost impossible to get agency contract work as a sole trader.
- No limited liability, which means the risk sits with you personally.
In practice, sole trader status tends to work well where the work is genuinely independent and project-based, clients are direct (or overseas), and simplicity matters more than optimisation. Many new arrivals start as a sole trader to get moving quickly, then incorporate later if contracting becomes more established.
The sensible approach
There is no single “correct” structure for everyone. The right choice depends on the type of work you do, how long you plan to contract in the UK, your appetite for admin, and your wider tax position.
What matters most is understanding that the UK system is different, and that the structure you used back home may not be the best fit here. Getting this decision right early can save a lot of friction later on.
“…the service has been fabulous.”
Ah Mike, we think you’re pretty fabulous too!
Retirement and Savings, Getting Set Up Properly
Retirement and long-term savings are rarely top of the list when you are planning a move to the UK. Jobs, visas, somewhere to live, and getting paid usually come first.
The problem is that the decisions you don’t make early around savings can quietly create tax inefficiencies that linger for years. For Kiwis and Aussies in particular, there are a few recurring traps worth understanding.
KiwiSaver and Australian super, where people get caught out
KiwiSaver and Australian superannuation are designed to work neatly within their home systems. Once you become UK tax resident, that neatness often disappears.
For New Zealanders, one common issue is the non-resident PIR rate. If you’re no longer NZ tax resident, KiwiSaver investment income is usually taxed at 28% PIR, and most people can’t elect a lower PIR once they’re non-resident.
From a UK perspective, drawing money from KiwiSaver or Australian super while you are UK tax resident can also create UK tax issues. Depending on the nature of the payment and your wider circumstances, withdrawals may be treated as taxable income in the UK, even if you think of them as “retirement money”.
The result is a classic trap. Money that feels locked away and tax-efficient back home can become awkward and inefficient once you live in the UK. Moving money out without advice is one of the quickest ways to create an unexpected tax bill.
ISAs, the UK’s quiet superpower
One of the most underappreciated features of the UK tax system is the Individual Savings Account, or ISA.
An ISA allows you to save or invest up to £20,000 per tax year, with all income and gains inside the ISA completely free of UK tax. No income tax, no capital gains tax, and no reporting on a tax return.
For many Kiwi and Aussie expats, this is a far better long-term savings vehicle than continuing to build up savings in NZ or Australian bank accounts that now sit firmly inside the UK tax net.
ISAs are flexible, simple, and powerful. Over time, they can form a very effective tax-free nest egg, particularly for contractors and professionals with surplus cash flow.
It is one of those tools that people wish they had started using earlier. If you are not using up your ISA allowance each year, AND if you have investments back home, strongly consider moving those into a UK ISA – the tax impact will be satisfying.
QROPS and thinking about the exit
While retirement planning often feels distant when you first arrive, it is worth knowing that the UK pension system is relatively portable.
If you build up a UK pension and later decide to return to New Zealand or Australia, it may be possible to transfer that pension overseas using a Qualifying Recognised Overseas Pension Scheme, known as QROPS.
The rules around pension transfers, overseas schemes, and tax treatment are technical, and they continue to evolve. It is also important to be aware that UK tax treatment when you eventually leave the UK can be influenced by how long you have been resident and how your pension arrangements are structured.
At the moment the key message is (a) putting money aside into a UK personal pension is tax efficient, (b) can be tax-efficient in the right circumstances, but the rules are technical.
Inheritance Tax, The “Tail Provision” to Be Aware Of
Inheritance Tax is one of those topics that tends to make people uneasy, and understandably so. It is also an area where recent rule changes have quietly shifted the goalposts for Kiwis and Aussies moving to, and eventually away from, the UK.
Plus, because NZ and Australia have no inheritance rules, it can often be a bit of a blind spot.
Under the new system introduced from April 2025, UK Inheritance Tax is no longer driven by domicile in the traditional sense. Instead, it is now tied much more closely to long-term UK residence.
When UK Inheritance Tax can follow you home
Once you’ve been UK tax resident for at least 10 of the previous 20 tax years, you can be treated as a long-term UK resident for Inheritance Tax, which can bring your worldwide assets into the UK IHT net.
What catches many people out is this. Leaving the UK does not automatically switch UK Inheritance Tax off.
There is now what is commonly referred to as a “tail provision”. In broad terms, even after you move back to New Zealand or Australia, you (and ALL your worldwide assets) may remain within the UK Inheritance Tax regime for up to ten years, depending on how long you were UK resident beforehand.
Why this matters in practice
This is not something that affects everyone, and it is not a reason to panic. But it is important context.
People often assume that UK tax issues end the moment they leave the country. For income tax, that is often broadly true. For Inheritance Tax, it may not be.
If you build up significant wealth while living in the UK, or you already have meaningful assets overseas, understanding how long the UK’s Inheritance Tax reach can extend is an important part of long-term planning.
Keeping Your Overseas Job While Living in the UK
Not everyone who moves to the UK changes jobs. Many Kiwis and Aussies arrive already employed by a New Zealand or Australian employer and simply keep working, just from a different time zone.
From a work perspective, that can feel straightforward. From a UK tax perspective, it often isn’t.
Why PAYE and National Insurance still matter
If you are living in the UK and physically doing the work here, the UK will usually expect UK payroll taxes to be dealt with, even if your employer is overseas and has no UK presence.
This is where people get stuck. An overseas employer is often reluctant to register for UK PAYE, but HMRC still expects the UK position to be handled properly.
DPNI, the direct payment route
In some situations, HMRC allows what is commonly referred to as DPNI, a direct payment arrangement designed for overseas employers without a UK payroll.
Under a DPNI-style arrangement:
- You remain employed by your overseas employer.
- Your employer does not run a UK payroll.
- You register with HMRC and pay UK PAYE income tax and employee National Insurance directly.
- You may still need a UK tax return depending on your wider circumstances, but the key point is that PAYE and National Insurance are not ignored just because the employer is overseas.
For many overseas employers, this is the difference between “we can make this work” and “we can’t”, because it avoids them having to set up a UK payroll while still keeping things compliant.
A practical takeaway
If you are planning to keep your NZ or Australian job while living in the UK, do not assume nothing changes just because your employer is overseas. In many cases, your employment income becomes taxable in the UK once you are UK tax resident and working here, and there can still be admin to deal with back home depending on your situation.
No Worries Accounting can help you get this set up properly. Once everything is in place, we handle the ongoing UK admin and keep you informed of what is due and when, so you can focus on the job rather than trying to decode HMRC processes.
The “Three-Way Calendar” Headache
One of the more frustrating, but entirely predictable, issues for Kiwis and Aussies moving to the UK is that the tax years simply do not line up.
- Australia: 1 July to 30 June
- New Zealand: 1 April to 31 March
- UK: 6 April to 5 April
The UK is very much the odd one out. Starting a tax year on the 6th day of April?? Its just not normal.
Why this matters
Once you are UK tax resident, HMRC expects income to be reported on a 6 April to 5 April basis, even if that same income is reported overseas on a different tax-year cycle.
That can mean the same income period appearing in two different countries’ tax returns in the same year. This is not double taxation, relief is usually available under the Double Tax Agreement, but it is very often double reporting.
The NZ vs Australia difference
For New Zealanders, this is usually manageable. The NZ tax year (1 April to 31 March) is close enough to the UK tax year that, in practice, NZ filing figures can usually be used with minimal adjustment.
Australia is different. The Australian tax year runs from 1 July to 30 June, which cuts straight across the UK tax year. That usually means income needs to be pro-rated to fit the UK 6 April to 5 April reporting window, rather than lifted directly from an Australian tax return.
The practical tip
This is not something to panic about, but it does mean record-keeping matters from day one.
Keep clear timelines, retain payslips and income statements, and do not assume overseas tax returns will automatically line up with UK reporting. Treated properly, this is a paperwork issue rather than a tax cost.
Wrapping It All Up
Moving to the UK is exciting, but from a tax perspective, it is rarely as simple as “carry on as before, just in a different country”.
The rules changed materially from April 2025, particularly around tax residency, foreign income, and long-term exposure to UK Inheritance Tax. Add in differences around business structures, overseas property, retirement savings, and mismatched tax years, and it is easy to see why so many Kiwis and Aussies feel caught out after they arrive.
The good news is that none of this is unmanageable. Most of the issues we’ve covered are about understanding the system early, keeping decent records, and making a few informed choices at the right time. Get those foundations right, and the UK chapter can be predictable, compliant, and tax-efficient.
At No Worries Accounting, we specialise in exactly these situations. We work with Kiwis and Aussies living in the UK every day, helping them navigate UK tax rules in a way that makes sense in real life, not just on paper.
Whether you are planning your move, have just arrived, or have been in the UK for a while and want to make sure nothing has been missed, we can help you get things set up properly from the start.
If you would like advice that is tailored to your situation, get in touch with No Worries Accounting. We are UK tax specialists for New Zealanders and Australians, and we’ll help you understand what matters, what doesn’t, and what to do next, so you can focus on settling into life in the UK with confidence.