A letter from HMRC about money overseas can be unsettling. Perhaps you have a savings account from when you lived abroad, investments with a foreign broker or a property you rent out in another country.
You may have already paid tax overseas and assumed there was nothing more to do.
Receiving the letter does not automatically mean your personal tax return is wrong. Equally, paying tax abroad does not necessarily settle your UK tax responsibilities. The first step is to check what HMRC is asking about and whether it has been dealt with correctly.
Why has HMRC contacted you?
HMRC receives information about overseas accounts through agreements with other countries. One of these is the Common Reporting Standard, often shortened to CRS. Banks and investment providers report information to their local tax authorities, which can then share it with HMRC.
The information can include account balances, interest, dividends and money received from selling investments. It is not limited to accounts in places commonly described as tax havens.
That information is not, by itself, a calculation of your UK tax. An account balance is different from the income it has earned, and the money received from selling shares is not the same as the profit on those shares. We need to understand what a figure represents before deciding how it should be taxed.
Some letters are a prompt to check your tax affairs, rather than the start of a formal investigation. These are often called HMRC nudge letters. A letter opening a compliance check or requiring specific information is different, so the wording matters.
Does money kept overseas need to be declared in the UK?
If you are UK tax resident, you normally pay UK tax on income from around the world, subject to the allowances and reliefs available to you. That can include overseas savings interest, dividends, rental income and pensions. Gains from selling overseas investments or property may also need reporting on your personal tax return.
Two assumptions are particularly worth checking.
The first is that tax paid abroad means HMRC does not need to know about the income. You may be able to claim relief for overseas tax, but the income can still need reporting in the UK. The relief available depends on the type of income and the rules between the two countries; it is not always the full amount of foreign tax paid.
The second is that leaving the money in an overseas account keeps it outside UK tax. That is not a general exemption. Older tax years may involve the former remittance-basis rules, while from 6 April 2025 the Foreign Income and Gains regime offers relief to qualifying new UK residents. Neither applies simply because the money is abroad. Each year needs checking under the rules that apply to it.
If you have moved into or out of the UK, tell your accountant when. Where you were resident for tax purposes can be central to whether the income should have been reported here.
What should you check before replying?
Start with the full letter, including any forms or enclosures. Check which years it refers to, what HMRC wants you to do and the response date. If you are unsure whether it is genuine, verify it using contact details obtained independently through GOV.UK before sharing personal information.
Then gather the records needed to understand the issue. These will usually include:
- Statements for the overseas accounts, investments or rental property mentioned.
- Your UK personal tax returns, relevant overseas tax returns and evidence of tax paid abroad.
- Details of when you lived or worked outside the UK, together with any advice or tax claims made at the time.
Check that you are comparing the same dates as well as the same amounts. Overseas financial information may cover January to December rather than the UK tax year, so an annual statement may not match a figure on your personal tax return directly.
If the letter asks you to confirm that your tax affairs are correct, make sure you can support that answer before signing or replying. A quick “I already paid tax abroad” may not answer the question HMRC is asking.
If you need more time to obtain records or advice, ask HMRC before the response date. Do not assume the deadline has moved simply because someone is reviewing the letter for you.
What if something was left off your personal tax return?
The next step depends on the years involved and what has already been submitted.
A recent personal tax return may still be within the time limit for making a correction. Older omissions may need a different route. Adding several years of missing income to your latest personal tax return is not the way to correct the earlier years.
For unpaid UK tax connected with overseas income, gains or assets, HMRC has a process called the Worldwide Disclosure Facility, usually shortened to WDF.
You first notify HMRC that you intend to disclose. You then normally have 90 days from receiving its acknowledgement to submit the details and pay the amount due, including interest and any penalties. This is separate from the response date on the original letter.
The disclosure must be complete, including relevant UK tax omissions as well as the overseas issue. If you cannot pay in full, payment terms need to be agreed with HMRC before submitting. Outstanding personal tax returns or an existing enquiry may also affect how the matter should be handled.
Not everyone who receives a letter needs to make a disclosure. If the records show that the income was reported correctly or no UK tax was due, the task may instead be to explain that clearly and keep the evidence supporting the response.
Could there be penalties?
There can be penalties as well as tax and interest, but there is no single percentage that applies to every overseas-income case.
What went wrong, when it happened and whether an error was careless or deliberate can affect the outcome. Receiving a letter may also affect whether HMRC treats a later disclosure as prompted. Cooperating and providing a full explanation can matter, but it does not guarantee that no penalty will be charged.
The number of years that need reviewing also depends on the circumstances. Offshore tax rules can allow HMRC to look further back than people expect, so it is not safe to assume that only the latest personal tax return matters.
If deliberate non-disclosure or suspected tax fraud is involved, specialist advice is important before choosing how to proceed. HMRC has a separate Contractual Disclosure Facility for tax fraud; the WDF does not itself provide protection from prosecution.
You do not need to decide which penalty rules apply before asking for help. What matters is giving your adviser an accurate account of what happened.
How Thames Williams can help
You may know exactly which account HMRC is referring to but have no idea whether anything has been missed. Or you may already know that overseas income was left out and need help putting it right.
At Thames Williams, we can start with a review of the letter and the records relevant to it. We look at what HMRC is asking, what was included in your personal tax returns, where you were living and whether overseas tax or other reliefs have been taken into account.
The aim is to establish whether a correction is needed before deciding what work should follow.
Where a disclosure is required, we can identify the work needed to calculate the tax, interest and penalties, prepare the information for HMRC and deal with correspondence on your behalf. Where the figures were already correct, we can help prepare an explanation supported by the records.
An initial review is separate from preparing several years of calculations or handling a full disclosure. We will explain what the review covers, identify any further work that may be needed and agree the next steps with you before anything else is carried out.
We can also help make sure overseas income is included correctly in your ongoing Self Assessment tax returns, rather than only dealing with the years covered by the letter.
Have you received a letter about overseas income?
Tell us what the letter concerns, which years it mentions and the response deadline. You do not need to calculate the tax or decide whether you have made a mistake before contacting us.
We will explain what review would be useful and what information we need from you.
Talk to Thames Williams about your HMRC letter
This article provides general guidance. Your reporting obligations and the appropriate response depend on your circumstances and the wording of HMRC’s letter.
