Skip to content
HorizonUK Tax Solutions

Foreign Income

I invest through a UK broker while living abroad. Do I owe UK tax on my ETFs and funds?

Answered by Jordan Onraet-Wells, Founder & Chartered Tax Adviser (CTA). Published 17 August 2026. Last reviewed 17 August 2026.

The short answer

Broadly no while you remain genuinely non-UK resident: the UK has no charge on your gains from non-UK funds while you are non-resident, and where your broker sits is irrelevant, because the tax follows each fund's domicile rather than the platform. The traps are on the way back. Gains realised during a temporary non-residence of five years or less are charged in the year you return, and if a fund is not on HMRC's reporting funds list, selling it while UK resident triggers income tax at up to 45% on the entire gain since purchase, with no rebasing to the date you came home.

  • Your liability turns on residence under the Statutory Residence Test, not on where the account is held; most ETFs sold through UK platforms are Irish or Luxembourg vehicles, so they are offshore funds within the regime.
  • Gains on funds absent from HMRC's reporting funds list are offshore income gains, taxed at 20%, 40% or 45% instead of CGT at 18% or 24%, with no £3,000 annual exempt amount and the gain computed from your original acquisition cost.
  • The check is mechanical: search each holding by ISIN against HMRC's monthly reporting funds list before you sell, because status attaches to the specific share class and two classes of the same fund can differ.
  • Selling just before flying home only works for genuine long-term leavers: offshore income gains and capital gains realised while temporarily non-resident for five years or less are charged in the year of return.
  • Holdings inside an ISA are outside the regime entirely, and UK-domiciled OEICs and unit trusts are not offshore funds at all.

While you are non-resident, the UK broadly stands back

Whether you owe UK tax has nothing to do with your broker's address and everything to do with your residence, decided by the Statutory Residence Test. While you are non-UK resident, the UK has no charge on your gains from non-UK funds, subject to the anti-avoidance rules for short absences. But do not let that comfort hide what you are holding: a UK platform, an international broker and a foreign bank nominee are all just wrappers, and the offshore funds regime looks through to where each fund is domiciled. ETFs and mutual funds based in Ireland, Luxembourg, the Channel Islands, the Cayman Islands or the United States are offshore funds whatever the platform, and each one is either a reporting fund on HMRC's approved list or a non-reporting fund. Our offshore funds guide explains the regime and how to check the list by ISIN.

The two traps waiting when you come home

First, the five-year rule: if your time abroad amounts to temporary non-residence, gains you realised while away, including offshore income gains on non-reporting funds, are charged in the year you return, so a quick sale before the flight home does not work for short absences. The framework is covered in our guide to returning to the UK and temporary non-residence. Second, and larger, the non-reporting fund trap: there is no rebasing when you resume UK residence, so selling a non-reporting fund in your first year back charges the entire growth since you bought it, perhaps a decade earned wholly abroad, to income tax at your marginal rate. On a £100,000 gain the difference is stark: roughly £24,000 of CGT on a reporting fund for a higher rate taxpayer, against £40,000 and beyond as an offshore income gain once the additional rate and the Personal Allowance taper bite. Losses get the worst of both worlds, relieved only as capital losses that can never offset offshore income gains.

What to do before you move back

The sequencing questions have clean answers before the move and expensive ones after it: which holdings are non-reporting, whether to realise them while still non-resident under the SRT and split year rules, and what switching into reporting share classes would crystallise. One group has an escape hatch: a qualifying new resident, back after at least 10 consecutive non-resident years, can claim relief under the four-year FIG regime on eligible offshore fund income and gains, which can make the first four UK years the right window to clear non-reporting positions. This is tax treatment only, not investment advice. Horizon reviews fund portfolios ISIN by ISIN and plans disposals around residence dates on fixed fees agreed upfront, with complex work from £750; book a free 30-minute clarity call before you book the flight.

Go deeper

Sources and further reading

This is general information for the 2026/27 UK tax year, not personal tax advice; speak to a Chartered Tax Adviser about your own position.

Applies to you? Ask us directly

A page can only take you so far. Book a free 30-minute clarity call with Jordan, a Chartered Tax Adviser, and get this answered for your exact situation, on a fixed fee agreed upfront.

All quick answers
WhatsApp