Student holding BNO visa: reporting and paying foreign tax?

Hi I am a full-time student at a UK university from Hong Kong holding a BNO visa. I have a part-time casual job in the UK that I work for a few hours a week and earn less than £500 a month. On top of this, I receive income from dividends and selling of shares in Hong Kong. Now that a company in Hong Kong intends to hire me as a freelancer, I am confused about tax issues. Being a full-time student, am I correct that I DO NOT need to report or pay UK tax on my foreign income, as all these funds are used solely for covering my course fees and living costs, even though I am holding a BNO visa rather than a Student Route visa? Thank you.

Hi,

Under Article 19 of the Double Taxation Agreement with Hong Kong, any income you receive is only tax free if your only reason for being in the UK is to study. As a BNO visa is not a student visa, your income will need to be declared.

Thank you.

Hi Thank you for the reply. Does this mean the Article 19 of the Double Taxation Agreement with Hong Kong only applies to students only if s/he is holding a Student Route visa, and that the article does not apply to any full-time student holding another kind of visa? Thank you.

Hi G,

That is correct.

Thank you.

Hi Thanks a lot for the confirmation. I would also like to know if I decide to take up a freelance position offered by a company out of the UK, am I required to set up myself as a sole trader for tax self assessment during or after the current tax year? Moreover, assuming that I have to declare all my foreign income, including bank interests, dividends, capital gains and overseas wages, am I correct that there is additional allowance for each category on top of the £12,570 personal tax allowance? If so, how much is the allowance for each category? Thank you.

Hi G,
You would need to set yourself as a sole trader up by 5 October 2024 if you are working this year to avoid any penalties.
You can do this anytime before that date.
You will have one personal allowance of £12570.
Interest savings and dividends, £1000 each and capital gains £6000, this is all for the 2023/24 tax year.
Thank you. 
 

Hi, Thanks for the reply. I'm still confused how the allowances are applied and need further clarification. Could you please confirm if the personal tax allowance is the fundamental allowance that applies to all types of income, such as salary and investment returns? Additionally, are the other allowances (Interest savings and dividends at £1000 each, and capital gains at £6000) in addition to the basic personal allowance of £12570? In simpler terms, for individuals who both invest and earn interest from savings, would their total allowance be £12570 + £1000 + £1000 + £6000? Thank you.

Hi
Yes that is correct.
Thankyou.

Hi Thank you for the response. I would greatly appreciate it if you could further clarify whether certain types of income are prioritized when considering them for the personal tax allowance. To illustrate, suppose my total income for the year comprises £5000 from a job in the UK, £6000 from freelance work for foreign companies, £3000 from foreign stock dividends, and £4000 from foreign capital gains. The total amount of £18000 exceeds the personal tax allowance. In this case, I am curious to know which portions of the income sources are eligible for further tax allowance and how I can calculate the taxable amount. Thank you for your assistance.

Hi
The allowances would go against your PAYE income, then the self employment and then the excess dividends over the dividend allowance.
Your personal allowances cannot be used for capital gains tax.
You have a separate allowance for this which is currently £6000 (23/24).
Thankyou.

Hi Thank you very much for the prompt response. I have two further questions: (1) are foreign savings interests prioritised over dividends when calculating the tax amount? (2) Do I need to declare "I have Capital Gains to pay" in the self assessment registration form if I had more capital losses than capital gains in the year? Thank you.

Hi,
Yes interest is prioritised over dividends. You need to complete the capital gains section of the tax return to declare both the gains and losses.
Thank you.

Hi, Thank you very much for the reply. I would appreciate some guidance on how to properly complete the self-assessment form. Specifically, I have a question regarding reporting foreign income. The form allows for multiple entries of the same type of income (such as foreign bank interest). Should I calculate the total annual amount and enter it as a single figure, or should I enter the monthly interest amounts individually based on my monthly bank statements? Thank you once again.

Hi G,

Please refer to guidance at:- Tax on foreign income

Thank you.

Hi, I am a full-time student holding a BNO visa. My income is from my parents which are solely used for education and living purposes. I do not have any income from working or investing both inside and outside the UK. Does it mean my current income state is considered tax free? Do I still need to do any actions such as a declaration or self assessment to prove my tax free status? Thank you.

Hi Kim T,
There are no Income Tax implications on the receipt of a cash gift unless the cash gift generates interest or dividends.
These would then potentially be subject to tax.
Further guidance can be found here:
Tax on savings interest
Tax on dividends
Thank you. 

 

Hi, I am currently a full-time student, switching from student visa to BNO visa recently in Mar. Will I have to declare all my foreign income if I have got any, please? Thank you

Hi TC,
If not claiming the remittance basis then yes.
For remittance basis please refer to:
Paying tax on the remittance basis (Self Assessment helpsheet HS264)
Thank you.