United Kingdom - Overview and introduction

United Kingdom - Overview and introduction

Taxation of international executives


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The extent of the liability to U.K. tax on earnings depends upon the individual’s residence status in the United Kingdom. Prior to 6 April 2013, residence was based on case law and depended mainly on the length of time an individual spent (or intended to spend) in the United Kingdom, although it could also be affected by other factors such as whether or not he/she purchased accommodation in the United Kingdom. However, due to these existing “uncertain and complicated residence rules”, the U.K. Government introduced a Statutory Residence Test (“SRT”) with effect from April 6, 2013.

The domicile status of the individual can also affect the liability.

The maximum U.K. income tax rate for the tax year ending April 5, 2017 is 45 percent.

The U.K. tax authority is known as Her Majesty’s Revenue and Customs (“HMRC”).

The official currency of the U.K. is the pound sterling, often referred to just as sterling or as the British pound (GBP). The U.K. has a decimal currency system with 100p (pence) making up GBP 1 (one pound).

Herein, the host country refers to the country to which the employee is assigned. The home country refers to the country where the assignee lives when he/she is not on assignment.

© 2017 KPMG LLP, a United Kingdom legal liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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