Denmark Tax Guide for UK Nationals Post-Brexit

Residency Status Post-Brexit

• Withdrawal Agreement protection (Article 13-15): UK nationals who were legally resident in Denmark before 31 December 2020 retain permanent residence rights under the Brexit Withdrawal Agreement. Their residency status for tax purposes is unchanged — they remain Danish tax residents under the standard 6-month/183-day rule. The Withdrawal Agreement protects rights to stay, work, and access social benefits, but does not affect tax treatment (which is governed by the UK-DK treaty).
• Post-2020 arrivals: UK nationals moving to Denmark after 1 January 2021 are subject to the standard Danish immigration rules for non-EU nationals (except those covered by the transitional arrangements for family reunification). Tax residency follows the standard rules: fuld skattepligt after 6 months of physical presence, or from day 1 if the stay is intended to exceed 6 months. A Danish residence permit (opholdstilladelse) is required for stays over 90 days.
• Dual residence risk: UK nationals who maintain significant ties to the UK (home, bank accounts, family, business interests) while living in Denmark risk being treated as dual residents. The UK-DK treaty tie-breaker (Article 4) determines residency by: permanent home, centre of vital interests, habitual abode, and nationality. Many UK nationals who split time between the two countries have been caught by this — obtain a certificate of residence from SKAT to confirm Danish tax residency.
• Impact of UK non-dom rules (abolished): The UK abolished the non-dom regime for tax purposes from 6 April 2025. UK nationals living in Denmark can no longer claim the remittance basis for UK-source income. All UK income is now taxed on an arising basis in both countries, making the foreign tax credit mechanism in Denmark critical.

UK-Denmark Double Taxation Treaty

The UK-DK treaty (signed 1980, amended by protocols) remains in full force post-Brexit. The UK did not terminate any double tax treaties upon leaving the EU. Key provisions:

• Dividends (Article 10): 0% WHT for ≥10% holdings, 15% for portfolio dividends. The UK does not levy WHT on dividends paid to Danish residents, and Denmark applies the participation exemption for qualifying corporate recipients.
• Interest (Article 11): 0% WHT in both directions. Interest paid by a Danish payer to a UK resident is exempt from Danish WHT (subject to beneficial ownership and anti-abuse).
• Royalties (Article 12): 0% WHT. Royalties paid from Denmark to a UK beneficial owner are exempt from Danish WHT.
• Capital gains (Article 13): Gains on shares are taxable only in the country of residence of the seller (Denmark for Danish residents). The exception is shares deriving >50% of value from Danish real estate — Denmark can tax the gain. This is critical for UK nationals selling shares in a Danish property-holding company.
• Pensions (Article 18): Pensions (including UK state pension and private pensions) are taxable only in the country of residence. Since 2018 protocol, this is the residence country — Denmark, for Danish-resident UK nationals. The UK does not tax UK pensions paid to Danish residents. This differs from the pre-2018 position where the source country (UK) had primary taxing rights. Transitional rules may apply to pensions that began before 2018.
• Employment income (Article 15): If you work remotely for a UK employer while living in Denmark, the income is taxable in Denmark (where the work is performed). The 183-day rule in Article 15(2) can preserve UK taxing rights only if: (a) you spend <183 days in Denmark, (b) the employer is not a Danish resident, and (c) the salary is not borne by a Danish PE of the employer. For most Danish-resident UK nationals, condition (a) fails — all days worked from Denmark count.

UK Pensions in Denmark

• UK State Pension: Taxable in Denmark as ordinary income (personlig indkomst) under the treaty. The UK does not deduct tax at source (no WHT on state pension). You report the gross UK state pension on your Danish årsopgørelse under field 17 (foreign pension). The UK state pension is increased annually by the Triple Lock and paid gross. Danish tax is due at progressive rates (up to ~52%). No foreign tax credit applies because no UK tax is withheld.
• UK Private Pensions (occupational and personal): Also taxable only in Denmark under the treaty. UK private pension providers typically deduct tax at source under PAYE unless you have notified HMRC that you are non-resident. To receive the pension gross (without UK tax deduction): (a) notify HMRC of your non-residence using form P85, (b) provide HMRC with your Danish tax reference and proof of Danish tax residence, and (c) ask your pension provider to apply the NT tax code (no tax). If UK tax has been incorrectly deducted, you must claim a refund from HMRC (form DT-Individual or self-assessment repayment).
• SIPPs (Self-Invested Personal Pensions): Danish tax treatment follows the same rules as other UK private pensions — the full withdrawal is taxable in Denmark at progressive rates. However, SIPPs are not recognised as approved Danish pension schemes under ligningsloven. This means: (a) contributions are not deductible in Denmark, (b) the PAL tax (15.3%) does not apply to SIPP investment growth (instead, the growth is untaxed until withdrawal), and (c) at withdrawal, the full amount is taxed as ordinary income. Consider transferring the SIPP to a Danish-approved pension scheme (QROPS or similar) if the SIPP value is significant, but obtain professional advice on UK exit tax implications.
• ISAs (Individual Savings Accounts): UK ISAs have no special status in Denmark. They are treated as ordinary investment accounts. Dividends and capital gains within the ISA are fully taxable in Denmark annually, even though they are tax-free in the UK. You must: (a) report all dividends and interest from the ISA on your Danish tax return each year, (b) report realised capital gains on disposals within the ISA, and (c) pay Danish tax on these amounts. The ISA wrapper provides no Danish tax benefit. Consider whether the investment strategy within the ISA is tax-efficient given Danish taxation.
• UK Pension Lump Sum (PCLS): The tax-free 25% lump sum (Pension Commencement Lump Sum) from UK pensions is treated as taxable income in Denmark under Danish domestic law — the Danish tax system does not recognise the UK tax-free amount. The full lump sum (including the 25%) is taxable in Denmark at progressive rates. The UK 25% tax-free treatment applies only in the UK. This is a common and costly trap for UK nationals retiring in Denmark.

UK Property Income

• Rental income: UK property rental income is taxable in Denmark as capital income (kapitalindkomst) at ~37% (or higher if the property is mortgaged). Report the gross rental income minus allowable deductions (mortgage interest, letting agent fees, maintenance, insurance, council tax paid by landlord) on your Danish tax return. The UK also taxes the rental income (20% basic rate on net profit, no personal allowance for non-residents since 2020). A foreign tax credit is available in Denmark for the UK tax paid — file for relief on the Danish tax return using the foreign tax credit rules. The credit is limited to the lower of: the UK tax actually paid, and the Danish tax attributable to the UK rental income.
• UK-corporate vs personal holding: Many UK nationals hold UK property through a UK limited company. Danish tax treatment of the company's income and distributions is complex — the company pays UK corporation tax (currently 25%), and dividends from the company to the Danish-resident shareholder are taxable in Denmark at 42% (over ~61,000 DKK). Consider whether the corporate structure remains tax-efficient given Danish taxation of the dividends.
• Capital gains on UK property sale: Selling UK property while resident in Denmark: (a) UK tax: non-residents since 2015 pay UK capital gains tax (18-24% for residential property, due within 60 days of completion via the UK CGT on property return), (b) Danish tax: the gain is taxable in Denmark as kapitalindkomst at ~37-42%. A foreign tax credit is available for the UK CGT paid. The gain is calculated in DKK using SKAT's exchange rate at the date of sale versus the date of acquisition. For owner-occupied property, check whether the Danish 3-year exemption for principal residence gains applies (it generally does not apply to foreign property — SKAT takes the position that the exemption is for Danish property only).
• Inheritance tax: UK property owned by a Danish-resident UK national is subject to UK inheritance tax (IHT) at 40% above the nil-rate band (£325,000). Denmark does not have inheritance tax on property passing to close family (spouse, children). The UK-DK estate tax treaty allocates taxing rights — UK property is taxable in the UK, Danish property in Denmark. For UK nationals with UK property valued over the nil-rate band, IHT planning is essential.

Social Security Coordination (Post-Brexit)

• UK-DK bilateral agreement: Since 1 January 2021, social security coordination is governed by the UK-DK bilateral agreement on social security (based on the draft EU-UK Trade and Cooperation Agreement provisions). The key principle is: you are covered by the social security system of the country where you work. If you work in Denmark, you pay Danish AM-bidrag (8%) and are covered by the Danish system (healthcare, unemployment benefits, state pension).
• Posted workers (A1 certificates): UK nationals posted to Denmark by a UK employer can remain in the UK social security system for up to 24 months (reduced from the EU rule of 5 years under Regulation 883/2004). An A1-equivalent certificate is issued by HMRC (CA8422 form) confirming UK coverage. After 24 months, Danish social security applies.
• Aggregation of contributions: UK and Danish social security contributions are aggregated for state pension purposes. Your UK National Insurance years count towards the Danish state pension (folkepension) qualifying period, and vice versa. Apply to SKAT for aggregation when you reach pension age.
• Healthcare (S1 certificate): UK state pensioners living in Denmark can obtain an S1 certificate (issued by the UK NHS Business Services Authority) entitling them to healthcare in Denmark at the UK's cost. Post-Brexit, this continues under the Withdrawal Agreement for those resident in Denmark before 2021. For post-2020 arrivals, the bilateral agreement may provide similar coverage — check with SKAT.

Practical Compliance Checklist

• Notify HMRC of non-residence: File form P85 to confirm your departure date, notify HMRC you are non-resident, and obtain the correct tax code for any UK income (pension, rental, dividends).
• UK self-assessment: If you have UK income (rental, self-employment, dividends), you may still need to file a UK self-assessment tax return each year, even as a non-resident. The filing deadline is 31 January following the tax year (5 April year-end).
• Danish tax return (årsopgørelse): Report all UK income (pensions, rental, dividends, capital gains, interest) on your Danish tax return. SKAT expects full disclosure. Use the foreign tax credit fields to claim relief for UK tax paid.
• Currency conversion: Convert all GBP amounts to DKK using SKAT's official exchange rates (www.skat.dk/satser). Average annual rates are generally acceptable for recurring income (pensions, rental). The rate on the transaction date is required for capital gains and one-off items.
• Professional advice: UK-DK cross-border taxation is complex, particularly for pensions (SIPP, PCLS), property, and inheritance planning. Engage a revisor with UK-DK cross-border experience. Many Danish accounting firms have UK specialist teams.

For related topics, see our Expat Arrival Guide →, Tax Treaties Guide →, Pension Tax Guide →, and Property Tax Guide →.