UK vs Andorra taxes 2026/27: how much British residents save by moving

On the same salary, a UK taxpayer who genuinely moves to Andorra keeps between £5,000 and £53,000 more a year. Andorra's income tax tops out at 10%, there is no wealth tax and no inheritance tax, and since December 2025 there is finally a UK–Andorra double tax treaty in force, which many websites still say does not exist. This guide puts the 2026/27 figures side by side and explains what HMRC expects before it accepts that you have really left.

Income tax: UK vs Andorra

The UK taxes employment income in bands on top of a £12,570 personal allowance. That allowance is withdrawn by £1 for every £2 of income above £100,000, which creates an effective 60% rate until £125,140. All the main thresholds are now frozen until April 2031, so more of your income drifts into the higher bands every year.

Andorra has a single 10% rate. The first €24,000 is tax-free and a relief brings the rate down to 5% between €24,000 and €40,000.

Scotland has six bands from 19% to 48% on earned income. The Andorran thresholds are in euros.

Take-home pay: four salaries compared

Single employee, no children, same gross salary in both countries. The UK column includes income tax and employee National Insurance. The Andorra column includes income tax and the employee's 6.5% CASS, converted at £1 = €1.185 (ECB reference rate, 16 October 2026).

Approximate figures with 2026/27 UK rates and 2026 Andorran rates, with no pension contributions, benefits or student loan. Employer contributions are not included.

Want your own numbers, with dividends and children? Use our free UK vs Andorra tax calculator.

Dividends, savings and capital gains

This is where the gap widens for business owners and investors, and where the UK keeps tightening.

Example: a director paying themselves £100,000 salary plus £20,000 dividends pays about £42,400 in the UK and about £14,900 in Andorra, a difference of roughly £27,500 a year.

Inheritance tax: the tail after you leave

Since 6 April 2025 the non-dom regime has gone and UK inheritance tax depends on residence, not domicile. If you have been UK resident for at least 10 of the last 20 tax years, you are a "long-term UK resident" and your worldwide estate stays within UK inheritance tax for a period after you leave:

Two more changes matter if you are planning ahead: unused pension funds will count towards your estate for deaths from 6 April 2027, and 100% business and agricultural property relief is capped at £2.5 million from April 2026. Andorra has no inheritance tax at all, so once the UK tail has run out, your estate is outside both systems.

The UK–Andorra double tax treaty

The treaty was signed on 20 February 2025 and entered into force on 22 December 2025. In the UK it applies to taxes withheld at source from 1 February 2026 and to income tax and capital gains tax from 6 April 2026; in Andorra, from 1 January 2026. The key points for someone moving:

• Tie-breaker: if both countries consider you resident, you are resident where you have a permanent home, then where your centre of vital interests is, then your habitual abode.
• Private and workplace pensions: taxable only in your country of residence (Article 17). Government service pensions generally remain taxable in the UK. Check how your State Pension is treated with an adviser before you move.
• UK property: rental income and gains on UK property can still be taxed in the UK, with a credit in Andorra.
• Withholding tax: 0% on dividends, interest and royalties between the two countries.

Leaving the UK: what HMRC checks

The UK decides residence with the Statutory Residence Test, not with a simple day count.

• Automatically non-resident: fewer than 16 days in the UK in the tax year (46 if you were not resident in any of the previous three years), or full-time work abroad with fewer than 91 days in the UK.
• Automatically resident: 183 days or more in the UK, your only home in the UK, or full-time work in the UK.
• In between: the "sufficient ties" test looks at family, accommodation, work and the days you spent in the UK in previous years.
• Split year: in the year you leave, the tax year is usually split into a UK-resident part and a non-resident part.
• Temporary non-residence: if you come back within five years, certain income and gains received while you were away can be taxed on your return.

In practice, sell or let your UK home on a proper lease, keep a record of your days, and make Andorra your real base. The Andorran side requires the same: tax residents must live in Andorra for more than 183 days a year.

How Britons get residency in Andorra

Since Brexit, British citizens are treated like any other non-EU nationals: you need a residence permit for stays of more than three months. Applications are made in person at the Immigration Department. The main routes in 2026 are:

• Employed: with a job offer from an Andorran employer.
• Self-employed: setting up your own company, with a non-refundable €50,000 contribution to the AFA and more than 183 days a year in Andorra.
• Passive residency: €1 million invested in Andorra (each property bought must be worth more than €800,000), a non-refundable €50,000 contribution plus €12,000 per dependant, and at least 90 days a year in the country.
• Youth mobility scheme: for UK nationals aged 18 to 30, for up to two years.

Every route needs somewhere to live, and housing is usually the step that takes longest. We explain each permit in our guide to residency in Andorra and the new rules in passive residency 2026.

Buying a home in Andorra as a British national

Non-residents need prior foreign investment authorisation, which takes around two months. Foreigners can own up to two homes, or one detached house or plot. Expect 4% transfer tax (or 4.5% IGI on new builds) and, for foreign investors, an extra 6% on the first home and 10% from the second. The average price of flats was €4,570/m² in the second quarter of 2026, with Escaldes-Engordany above €6,000/m². Full details in how to buy a house in Andorra and on our property prices page.

Frequently asked questions

Is there a double tax treaty between the UK and Andorra?

Yes. It entered into force on 22 December 2025 and applies to UK income tax and capital gains tax from 6 April 2026. Older articles saying there is no treaty are out of date.

How much tax would I save moving from the UK to Andorra?

On a £100,000 salary, about £18,300 a year; on £200,000, about £53,000. The saving is larger if you also receive dividends, and Andorra has no inheritance tax.

Can I keep my UK home if I move to Andorra?

You can, but an available UK home is one of the ties HMRC looks at, and if it is your only home you can be automatically UK resident. Many people let it on a long lease. Rental income from UK property is still taxed in the UK.

Do I still pay UK inheritance tax after moving to Andorra?

If you were UK resident for at least 10 of the last 20 tax years, your worldwide estate stays within UK inheritance tax for 3 to 10 years after you leave, depending on how long you lived in the UK.

Do British citizens need a visa to live in Andorra?

You do not need a visa to visit, but you need an Andorran residence permit to stay for more than three months. You arrive through France or Spain, so Schengen rules apply on the way in.

Will the 28 October 2026 Budget change these figures?

Possibly. The Autumn Budget is on 28 October 2026. We will update this article and our calculator if UK rates or thresholds change.

Sources: HMRC income tax rates and allowances 2026/27; HMRC National Insurance rates; UK–Andorra tax treaty (GOV.UK); Inheritance tax for long-term UK residents; Statutory Residence Test; FCDO entry requirements for Andorra; Govern d'Andorra IRPF guide; Llei 2/2026; ECB euro reference rates. Figures are approximate and for information only: this article does not constitute tax advice. Always check your situation with a qualified adviser in both countries.

Updated on 18/10/2026