Since 2020, the settlements between the UK and Poland are governed by new, less convenient rules: the MLI convention has replaced the old exclusion method with proportional deduction – and suddenly thousands of people with family in Poland discovered that "the Polish tax office is indeed interested in me." This guide (an addition to our basic guides on self-assessment and P85) focuses on cross-border issues: who is really a Polish resident, how the UK SRT test and the new FIG regime work, what the ISA trap means after moving, how to manage a UK rental property from Poland – and how to return to the country without tax surprises. The UK parameters for 2026/27 have been verified on gov.uk.
MLI Changed the Rules of the Game: Credit Method Since 2020
- Officially confirmed on podatki.gov.pl: for income from the UK earned from January 1, 2020, Poland applies the proportional deduction method (not exclusion with progression, as with Germany). A Polish resident with UK income files PIT-36 with attachment ZG, deducts UK tax – and may have to make an additional payment in Poland.
- The abatement relief only partially mitigates the additional payment: limit of 1,360 PLN per year – and note the nuance that almost no one knows: the relief covers work, business, and copyright, but DOES NOT cover rental income, dividends, or capital gains. Additional payments from UK rental income or dividends are taxed in Poland without any cushion.
- The "family in Poland" trap: Polish residency is determined by the center of vital interests or 183 days – a spouse and children in Poland usually determine Polish residency despite years of working in the UK. How to sort out your status is described in our guide on tax residency and PIT for the Polish diaspora.
The UK Side: SRT, Split Year, and the New FIG Regime
- UK residency is determined by the Statutory Residence Test (automatic tests of 183 days/home/work + "ties" tests), and the year of moving can be split (split year, 8 cases) – crucial when leaving and returning. Remember the calendar oddity: the UK tax year runs from April 6 to April 5, so when calculating the credit for PIT-36, you cut income to the Polish calendar year.
- The non-dom regime ended on April 6, 2025. It has been replaced by FIG: a new UK resident (after at least 10 years outside the UK) can exempt foreign income and gains (e.g., Polish rental, dividends) from UK tax for the first 4 tax years. The catch: using FIG forfeits Personal Allowance and the CGT exemption – for typical earnings, the loss of £12,570 in the allowance often outweighs the benefit; FIG is mainly beneficial for high Polish incomes. It also provides a pathway for those returning to the UK after a long absence.
UK Parameters 2026/27 (verified on gov.uk)
| Parameter | 2026/27 |
|---|---|
| Personal Allowance | £12,570 (frozen at least until 2028, and according to budget announcements, longer) |
| Income tax rates | 20% up to £50,270 / 40% up to £125,140 / 45% above |
| National Insurance (employee) | 8% (£242–967/week), 2% above |
| Dividends | Exemption amount £500; rates 10.75% / 35.75% / 39.35% – the first two have increased by 2 percentage points this year |
| CGT – exemption amount | £3,000 |
| Interest | PSA £1,000 (basic) / £500 (higher) + starting rate up to £5,000 |
| ISA | Limit £20,000 per year |
The ISA trap after moving to Poland: the UK ISA tax exemption ends at the UK border. A Polish resident pays Polish tax of 19% on interest, dividends, and gains in an ISA – the "tax-free wrapper" is invisible to the Polish tax office. Formally: after leaving, you cannot contribute to an ISA (you must inform the provider), but you can maintain the account and return to contributions after coming back. LISA has an additional thorn: withdrawal before age 60 (except for buying the first home up to £450k) incurs a 25% penalty – resulting in a real loss compared to contributions; when returning to Poland, it is usually best to leave LISA alone until sixty.
Returning to Poland? Roadmap
Close matters with HMRC
Besides self-assessment: form P85 (details in our guide on tax refunds and P85). In self-assessment: the last declaration with residency pages SA109 – note, only on paper or through a commercial program (paper deadline: October 31). Ordinary savings are not affected by the UK "exit tax".
Leaving a rental property? Sort out NRL
After 6 months abroad, you are a "non-resident landlord": the agent/tenant withholds tax at source unless HMRC agrees to gross payments (application NRL1i). Good news: as a Polish citizen (EEA country) you retain Personal Allowance – rent up to £12,570 is usually tax-free in the UK. Bad news: Poland will tax this rental income at a flat rate of 8.5%/12.5% with a small credit to deduct – and without abatement relief.
Property sale: 60-day rule
A non-resident selling UK property must file an NRCGT within 60 days of completion – even if there is no tax. Delays = automatic penalties.
Claim Polish return bonuses
Return relief: exemption from PIT up to 85,528 PLN per year for 4 years – the UK is directly on the list of countries whose documented 3-year residency qualifies for the relief. A full guide on moving – in the guide on returning to Poland after years.
Money Across the Channel: Transfers, Gifts, Accounts
- GBP does not travel SEPA (SEPA only covers euros – although the UK is formally still in the system): a pound transfer to Poland is via SWIFT or fintech (Wise/Revolut) – compare the total exchange rate, not just the fee. There are no legal limits; for large amounts, the bank will ask about the source of funds (AML) – keep documents.
- Transfers to family in Poland: a gift from close family is exempt from Polish tax without limit if reported on SD-Z2 within 6 months and documented by transfer (a transfer from your UK account meets the requirement; cash in hand does not). Details in the guide on money gifts in the family.
- UK account after leaving: some banks are closing accounts for clients with an address in the EU (a wave after losing "passporting") – check your bank's policy before moving and do not hide the address change; alternatives can be e-money institutions. Also, be aware that your UK credit history does not exist in Poland – BIK starts from scratch.
- Child Benefit will not travel with you: for those leaving, child benefits in Poland are generally not available (exceptions mainly concern individuals protected by the withdrawal agreement and still contributing in the UK). With incomes of £60–80k, remember about HICBC (1% refund for every £200 over the threshold).
- Remote work and secondment: an employee temporarily sent from the UK to Poland can remain in UK NI for up to 2 years (certificate from HMRC); working permanently from Poland for a UK company – contributions and PIT in Poland (mechanics in the guide on remote work from Poland).
Three profiles – three priorities: you work in the UK, family in Poland → establish residency and account for PIT-36/ZG and additional payments (abatement relief max 1,360 PLN); you return to Poland → SA109/P85, decision on ISA/LISA, NRL1i for rental, return relief; you move to the UK after years in Poland → check if FIG (4 years of exemption for foreign income) is more beneficial than Personal Allowance. And pensions from both countries are a separate story – guide on State Pension and ZUS.
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