TaxDigit

Author: Amir Rafiei

There is no comprehensive double taxation agreement between the United Kingdom and Iran. HMRC says so plainly in its own Double Taxation Relief manual, and Iran is one of very few significant economies where that remains true. TaxDigit are chartered certified accountants in Guildford, Surrey, advising Farsi-speaking clients across the UK, and this is the single most misunderstood point we deal with. This article explains what you get instead of treaty relief, why your nationality can decide whether you receive a UK personal allowance at all, and what the four-year regime for new arrivals is really worth.

No UK–Iran double tax treaty — unilateral foreign tax credit relief, the non-resident personal allowance and the four-year FIG regime - TaxDigit accountants in Surrey

What “No Treaty” Actually Means

GOV.UK does list an entry for Iran in its tax treaties collection, which misleads a great many people who go looking. The only document behind that entry is the UK–Iran Air Transport Agreement of 1960 (SI 1960/2419), in force since 9 April 1960 and having effect from 1 January 1957. It deals with the profits of air transport undertakings and nothing else, and HMRC’s guidance confirms it does not provide for tax credit.

The practical consequences are these. There is no treaty article allocating taxing rights between the two countries. There are no reduced rates of withholding tax on Iranian dividends, interest or royalties. There is no residence tie-breaker to resolve a case where both countries treat you as resident. And there is no non-discrimination article. Everything falls back on UK domestic law.

Unilateral Relief Is What You Get Instead

UK domestic law does not leave you exposed to full double taxation. Part 2 of the Taxation (International and Other Provisions) Act 2010 provides unilateral relief: where you have paid Iranian tax on income or gains arising in Iran, you can credit that tax against the UK tax on the same income. The credit is capped at the UK tax due on that income, so if the Iranian rate is higher than the UK rate the excess is simply lost — there is no refund and, without a treaty, no mutual agreement procedure to argue about it.

Where a credit is worth little — for example because the UK tax on that slice of income is nil — the alternative is relief by deduction: treating the foreign tax as an expense and taxing only the net amount. It is often the better answer for smaller amounts of Iranian rental income, and it is a choice, not an automatic default. Whichever route you take, keep the Iranian assessment or withholding evidence. HMRC asks for it, and reconstructing it years later from Tehran is not a pleasant exercise.

The Personal Allowance Trap for Non‑Residents

This is where the absence of a treaty bites hardest, and it catches people out constantly.

If you are UK resident, your nationality is irrelevant — you get the personal allowance (£12,570 for 2026/27) like anyone else. If you are non‑resident, though, you only get it if you fall into one of the categories listed in section 56 of the Income Tax Act 2007. Those categories include British citizens and nationals of EEA states. They also include anyone entitled to it under a double taxation agreement — and that is precisely the route that does not exist for Iran.

So a non‑resident Iranian national who does not also hold British or EEA citizenship, and who does not fall into another listed category, has no entitlement to the UK personal allowance at all. Every pound of UK rental profit is taxable from the first pound. Many of our clients are dual British–Iranian nationals and are unaffected; those who are not should assume the allowance is unavailable until it is checked. Non‑residents who are entitled claim it after the end of the tax year on form R43.

The Four‑Year FIG Regime — and What It Costs You

The remittance basis was abolished for all UK residents from 6 April 2025 and replaced by the four‑year Foreign Income and Gains regime. The eligibility test is refreshingly simple: you must be UK resident, within your first four years of UK residence, following at least ten consecutive tax years of non‑residence. Nationality and domicile are irrelevant, and so is whether you could ever have used the remittance basis.

Claimed successfully, it takes qualifying foreign income and gains — Iranian rental profits, Iranian dividends and interest, qualifying foreign gains — out of UK tax for that year. But it is claimed year by year, and it is not free. For any year you claim it you forfeit the personal allowance and the capital gains annual exempt amount (£3,000 for 2026/27), along with the married couple’s and blind person’s allowances. Foreign employment earnings are outside the regime altogether; those are dealt with under Overseas Workday Relief, which for FIG claimants is capped at the lower of £300,000 or 30% of qualifying employment income.

The arithmetic therefore turns on how much foreign income you actually have. For a client with modest Iranian rental income, giving up the personal allowance can cost more than the relief saves. It is a calculation, not a default.

One Deadline Worth Marking

If you were previously taxed on the remittance basis and still hold unremitted pre‑6 April 2025 foreign income and gains, the Temporary Repatriation Facility lets you designate those amounts and bring them into the UK at a flat rate. The rate is 12% for 2025/26 and 2026/27, rising to 15% for 2027/28, after which the facility closes for good. The designation for 2026/27 is made through your Self Assessment return.

2026/27 is the last year at 12%. If this applies to you, it is the most time‑sensitive decision on this page.

What Iranian Clients Should Do Now

  • Establish your UK residence position under the Statutory Residence Test before assuming anything — it counts days and ties, and it takes no notice of your visa.
  • If you are non‑resident and not a British or EEA national, check your personal allowance position rather than assuming it applies.
  • Gather evidence of any Iranian tax paid, and keep it. Without it, a foreign tax credit claim is difficult to sustain.
  • If you arrived in the UK within the last four years after a decade abroad, model the FIG regime properly against the allowances it costs you.
  • If you hold unremitted pre‑April 2025 foreign income, decide on the Temporary Repatriation Facility before the 12% rate becomes 15%.

Frequently Asked Questions

Is there a tax treaty between the UK and Iran?

Not a comprehensive one. HMRC confirms there is no comprehensive double taxation agreement between the UK and Iran. The only instrument is the 1960 Air Transport Agreement, covering the profits of air transport undertakings, which does not provide for tax credit relief.

Will I be taxed twice on my Iranian rental income?

Not usually. Unilateral relief under TIOPA 2010 lets you credit Iranian tax paid against the UK tax on the same income, capped at the UK tax due. Where a credit is worth little, relief by deduction may give a better result. You need evidence of the Iranian tax paid either way.

Do Iranian citizens get the UK personal allowance?

If you are UK resident, yes — nationality does not matter. If you are non‑resident, you only qualify through one of the categories in section 56 ITA 2007, such as British citizenship or EEA nationality, or through a double taxation agreement. Because there is no UK–Iran agreement, a non‑resident Iranian national without another qualifying status is not entitled to it.

I moved to the UK last year. Should I claim the FIG regime?

Only if the maths works. It removes qualifying foreign income and gains from UK tax for up to four years, but each year you claim it you lose your personal allowance and your capital gains annual exempt amount. With modest foreign income the allowances are often worth more than the relief.

How TaxDigit Can Help

We advise Farsi‑speaking clients on exactly these questions every week: residence and split‑year positions, foreign tax credit claims, whether the FIG regime is worth claiming, and how Iranian property and business interests sit alongside a UK return. You can find more on our international and expat tax, personal tax and non‑resident landlord pages, and Farsi‑speaking support through our Iranian accountant in London service. HMRC’s own confirmation of the position is in its Double Taxation Relief manual at DT9750.

Everything can be discussed in Farsi. All filings and HMRC correspondence are handled in English by the same team, so nothing is lost between the two.

Plan Ahead With TaxDigit

If you have income, property or a business in Iran and you are living in the UK — or you are about to move — the order in which you do things in your first UK tax year matters a great deal. It is far easier to plan it in advance than to unpick it after a return has been filed. Call 01483 230 777, email info@taxdigit.co.uk, or use our contact page to arrange a conversation.

This article reflects the position as at 2 August 2026 and describes UK tax rules of general application. It is not advice for your circumstances.

Locum doctors are not just another staffing supply — on 17 July 2026 HMRC published Revenue and Customs Brief 6 (2026), replacing Brief 9 (2025) and confirming that supplies of GMC-registered locum doctors can fall within the VAT exemption at Item 5, Group 7, Schedule 9 of the VAT Act 1994, including where the doctor is supplied through an employment business. As chartered certified accountants in Surrey advising medical staffing businesses, GP practices and private clinics across the UK, TaxDigit explains what HMRC has conceded, where it has drawn the line, and how the four-year refund window works.

Locum doctor VAT exemption under HMRC Brief 6 (2026) from 17 July 2026, with a four-year refund window - TaxDigit accountants in Surrey

What the Locum Doctor Exemption Is — and Why It Matters

Item 5 of Group 7, Schedule 9 exempts “the provision of a deputy for a person registered in the register of medical practitioners”. For years HMRC read that wording extremely narrowly, treating it as covering little more than out-of-hours GP deputising services. Since the staff hire concession was withdrawn in 2009, agencies and employment businesses have generally charged 20% VAT on locum doctors as a supply of staff.

That is an expensive default. NHS trusts, GP practices and most private healthcare providers make exempt supplies, so VAT charged on locum cover is largely irrecoverable — a genuine 20% cost on one of the largest lines in a clinical budget. In Isle of Wight NHS Trust v HMRC [2025] UKFTT 1114 (TC), the First-tier Tribunal held that HMRC’s interpretation was too narrow and that locums supplied by agencies can also come within Item 5. HMRC did not appeal.

What Changes From 17 July 2026

  • Brief 6 (2026) replaces Brief 9 (2025) and sets out HMRC’s settled position following the tribunal decision.
  • Exemption can apply where the individual is registered in the GMC register of medical practitioners and is performing medical services in that professional capacity.
  • It applies whether the doctor is engaged directly or supplied through an employment business or staffing agency.
  • It is no longer limited to out-of-hours GP cover — the narrow deputising reading has gone.
  • Suppliers who accounted for output tax on qualifying supplies may claim a refund on form VAT652, restricted to the last four years.

Claims should be marked “Locum doctors claim RCB 6/26” and sent to the dedicated HMRC mailbox, with calculations broken down by VAT return period.

The Catch — Who Is Still Outside the Exemption

HMRC has kept the scope deliberately tight, and this is where most of the risk sits. The Brief states that other health professionals registered with the GMC — including allied health professionals, anaesthesia associates and physician associates — are not within this exemption, and neither are general staffing services where what is really being supplied is a body rather than medical care.

Equally important: VAT exemption is not optional. A supplier that becomes partly exempt loses input tax recovery on related costs, and HMRC can charge interest of up to 8% on input tax already reclaimed. A refund claim that looks attractive on the output tax line can be materially smaller once the input tax clawback and partial exemption method are worked through.

Who Benefits — and Who Should Still Pay Attention

The clearest winners are NHS bodies, GP practices and private clinics that have been absorbing irrecoverable VAT on locum cover. Staffing suppliers benefit too, but only where they can show the refund belongs to them: HMRC will not repay output tax where doing so would unjustly enrich the supplier, which usually means proving the VAT was a cost the supplier bore rather than one passed on in the price.

Practices using non-doctor temporary staff should not assume the same treatment applies, and anyone mid-way through an HMRC enquiry or appeal should expect claims to be held until that concludes.

What Suppliers and Clinics Should Do Now

  • Review the last four years of locum doctor invoices and identify which supplies involved a GMC-registered doctor delivering medical services.
  • Read the contracts: whether a clinic can recover wrongly charged VAT from its supplier usually turns on the VAT clause and whether the price was VAT-inclusive.
  • Model the partial exemption consequences and input tax clawback before submitting anything — a gross claim is not a net benefit.
  • Prepare the unjust enrichment evidence: pricing methodology, correspondence and how customers treated the VAT.
  • Fix the treatment going forward, so you are not still standard-rating supplies that should now be exempt.

Frequently Asked Questions

Are all locum doctors now VAT exempt?

No. The exemption applies where the individual is GMC-registered and is performing medical services in that professional capacity. A doctor supplied to cover an administrative or managerial role is not automatically covered.

Can a clinic claim the VAT back from HMRC directly?

Not usually. The output tax was accounted for by the supplier, so the claim is the supplier’s. A clinic normally has to ask its supplier to make the claim and pass the benefit on, subject to the contract.

How far back can a claim go?

Four years. The usual VAT capping rules apply, so each month of delay closes another period permanently.

Does this cover physician associates?

No. HMRC has expressly excluded physician associates, anaesthesia associates and allied health professionals, even though they are GMC-registered.

How TaxDigit Can Help

TaxDigit advises on VAT liability, partial exemption and error correction, alongside tax advisory and planning and day-to-day bookkeeping for healthcare businesses. We can review four years of locum supplies, quantify the net claim after input tax clawback, prepare the VAT652 and build the unjust enrichment file. If you also hold significant capital assets, our note on the 2026 Capital Goods Scheme reform is worth reading alongside this. The Brief itself is on gov.uk.

Plan Ahead With TaxDigit

If you supply or engage locum doctors, the four-year window is already closing at one period a month. Call 01483 230 777, email info@taxdigit.co.uk or book a consultation with our team in Guildford, Surrey.

Stamp duty on shares is finally going digital — on 13 July 2026 HMRC published draft legislation for a new Securities Transfer Tax (STT), a single, self-assessed, fully digital tax that will replace both stamp duty and stamp duty reserve tax (SDRT) on transfers of securities, targeted for introduction in 2027. As chartered certified accountants in Surrey advising companies and shareholders across the UK, TaxDigit explains what the new regime means for share sales, company purchases and group reorganisations, and what to do before the rules change.

Securities Transfer Tax to replace stamp duty and SDRT from 2027 with a four-year transitional period - HMRC draft legislation 13 July 2026 - TaxDigit accountants in Surrey

What Is the Securities Transfer Tax — and Why It Matters

Today, tax on share transfers is split between two regimes: stamp duty, a document-based charge dating back to 1891 that still requires stock transfer forms to be sent to HMRC for stamping, and SDRT, which applies to paperless transactions settled electronically through CREST. Running two parallel systems for what is economically the same transaction creates duplication, delay and confusion — a company registrar cannot lawfully write up the register of members until a stamped instrument comes back from HMRC, which can hold up completions for weeks.

The Securities Transfer Tax sweeps both regimes away. Under HMRC’s policy paper Modernisation of the Stamp Taxes on Shares framework — Securities Transfer Tax, published with draft legislation on 13 July 2026, a single self-assessed tax will apply to transfers of securities, reported and paid through a new online portal. There will be no more physical stamping and no more paper-based reporting or payment.

What Changes From 2027

The government is aiming to introduce the STT and its legislative framework in 2027, with an update on the exact commencement date due in autumn 2026. The key features of the new regime are:

  • One tax, one portal — a single self-assessed charge replaces stamp duty and SDRT, reported and paid digitally; CREST will continue to handle transactions settled electronically.
  • The purchaser is liable — but an agent (such as your accountant or solicitor) can act as the “accountable person” and deal with reporting and payment.
  • Faster completions — a unique taxpayer reference number (UTRN) is generated immediately on submission of the return, and the registrar can write up the register of members as soon as the UTRN is received, rather than waiting for HMRC to stamp a document.
  • Clear payment deadlines — 30 days for off-market transfers, 14 days for transactions in electronic settlement systems, running from the earlier of substantial performance or completion.
  • Reliefs retained and self-assessed — stamp duty group relief, reconstruction and acquisition reliefs, the growth-market exemption and intermediary relief all carry over, claimed through the portal without waiting for HMRC adjudication.

The Transitional Rule

The draft legislation provides a four-year transitional period for transactions entered into before the commencement date of the new rules. In practice this means agreements signed under the old regime — conditional share purchase agreements, options and deferred completions among them — will need to be tracked carefully across the boundary, because the tax treatment of a deal signed in 2026 but completed after commencement will depend on the transitional provisions. Anyone negotiating a share sale or reorganisation now should consider how the change of regime affects timing.

Who Benefits — and Who Should Still Pay Attention

Buyers of private companies gain the most: no more sending stock transfer forms for stamping, no more weeks-long delays before the share register can be updated, and a clear digital process with an immediate UTRN. Groups undertaking reorganisations keep group relief and reconstruction relief, but these become self-assessed — the burden of getting the analysis right shifts squarely onto the taxpayer and their adviser, with a full compliance regime behind it. Trustees, partnerships and investors holding unlisted shares should also note that transfers of partnership interests are expected to move out of scope entirely under the new framework.

What Companies and Shareholders Should Do Now

  • Review any share purchase agreements, options or conditional deals that may straddle the 2027 commencement date and map them against the four-year transitional rules.
  • Factor the new 30-day and 14-day payment windows into completion timetables and funds-flow planning.
  • Check whether group reorganisations planned for 2027 onwards would be better accelerated or deferred once the commencement date is confirmed in autumn 2026.
  • Decide who will act as the accountable person for future transfers — the portal allows your accountant to take on the reporting and payment obligation.
  • Respond to the technical consultation, which closes on 7 September 2026, if the draft rules create issues for your transactions.

Frequently Asked Questions

What is the Securities Transfer Tax?

The Securities Transfer Tax (STT) is a proposed single, self-assessed, fully digital UK tax on transfers of securities. It will replace both stamp duty and stamp duty reserve tax, with reporting and payment handled through a new HMRC online portal.

When does the STT start?

The government is targeting introduction in 2027, with an update on the commencement date expected in autumn 2026. Draft legislation was published on 13 July 2026 and is open for technical consultation until 7 September 2026.

Will stamp duty group relief still exist?

Yes. Group relief, reconstruction and acquisition reliefs, the growth-market exemption and intermediary relief are all retained under the new regime, but they will be self-assessed through the portal rather than adjudicated by HMRC in advance.

Do I still need to send documents to HMRC for stamping?

Under the current rules, yes — stock transfer forms for off-market share purchases must still be submitted to HMRC with stamp duty paid within 30 days. Once the STT commences, physical stamping disappears entirely and everything is done digitally.

How TaxDigit Can Help

TaxDigit advises on the tax consequences of company share sales and purchases, group reorganisations and shareholder exits, alongside tax advisory and planning and year-end accounts support. We can review deals that straddle the 2027 changeover, act as your accountable person under the new regime, and structure transactions to preserve group and reconstruction reliefs. The full policy paper and draft legislation are on gov.uk.

Plan Ahead With TaxDigit

If you are buying or selling a company, restructuring a group or holding a deal that may complete after 2027, speak to us before the rules change. Call 01483 230 777, email info@taxdigit.co.uk or book a consultation with our team in Guildford, Surrey.