How Panama's territorial system works
Panama taxes income by where it arises, not by where you are resident. Panamanian-source income, including work you physically carry out in Panama, is taxed at progressive rates: 0% up to USD 11,000, 15% from USD 11,000 to USD 50,000 and 25% above that. Foreign-source income, such as UK dividends or gains on a non-Panamanian portfolio, is simply outside the Panamanian net, and because the test is where the income arises rather than where the money ends up, bringing it into Panama does not change the answer. A UK-Panama double taxation convention has also been in force since 12 December 2013, taking effect in the UK for income tax and capital gains tax from 6 April 2014.
The UK side is the real test
The UK taxes its residents on worldwide income, so a Panamanian visa changes nothing on its own. Panama's zero rate on foreign income only becomes yours once you are non-resident under the Statutory Residence Test, and the cleanest route is usually working full-time abroad with fewer than 91 UK days and no more than 30 UK workdays a year. Even then, UK rental profits and gains on UK property stay UK-taxable, and if you were UK resident in at least four of the seven tax years before leaving and return within five years, the temporary non-residence rules can tax gains and certain income you realised while away. Since 6 April 2025 inheritance tax has been residence-based too, so a long-term UK resident can stay exposed on worldwide assets for up to 10 years after departure.
HMRC can see Panamanian accounts
Panama takes part in the Common Reporting Standard, so Panamanian banks report accounts held by UK tax residents and HMRC receives that information automatically each year. The case for Panama therefore rests on a lawful territorial system plus a clean, well-documented UK exit, all of it fully declared. For split-year treatment, the P85 and SA109 admin and the 2026 residence visa routes, see our complete guide to UK tax when moving to Panama.