I have spent many years in finance, in a fairly niche corner of it, but I am not anyone’s tax adviser. I take external tax advice for my own affairs. What follows is background and context, not professional advice. Tax treatment depends on your personal circumstances and the countries involved. If you are making decisions, speak to a qualified accountant or lawyer who understands your situation.

A new expat quickly learns that almost every sensible financial move comes with a follow-up question:

Does this cause a problem somewhere else?

You think you are being prudent, only to discover that what works beautifully in one country becomes awkward, or worse, once you cross a border.

U.S. parents diligently fund 529 plans, then learn those accounts can be worse than useless in the UK. British ISAs are excellent for locals, but tax-toxic for Americans. Property retained back home may be taxed abroad even when it is cash-flow negative. Even U.S. municipal bonds, famously tax-exempt domestically, are often treated as fully taxable income overseas.

For expats, “doing the right thing” often comes with hidden consequences.

Which brings us to a deceptively simple question:

Are airline miles and hotel points taxable?

Most tax authorities treat loyalty points as rebates or discounts rather than income.

That distinction is important. A rebate reduces the price of something you have already bought. Income is something you receive in exchange for work or services. Points sit uncomfortably between the two, but historically, tax authorities have leaned toward the rebate interpretation.

You buy a flight. You earn miles. Those miles reduce the cost of a future flight.

That logic has held up remarkably well across jurisdictions.

In the U.S., the IRS has repeatedly indicated that frequent flyer miles earned through normal consumer activity are not taxable. In the UK, HMRC takes a similar view for personal travel. Courts have occasionally been asked to look at edge cases, but the mainstream treatment has been consistent for decades.

Crucially, this is not about generosity or oversight. It is about classification. Loyalty programmes are framed as price adjustments, not compensation.

The clean rebate logic starts to blur in a few specific situations.

Employer-paid travel is the obvious one. If your company pays for a flight and you keep the miles, there is a theoretical argument that you have received a personal benefit. Tax authorities are aware of this. They have largely chosen not to pursue it in practice, partly because valuation is messy and enforcement would be disproportionate.

Cash-like conversions are another. If points are redeemed for gift cards or merchandise rather than travel, the rebate narrative weakens. Some programmes even issue tax forms for certain redemptions. This is rare, but it exists.

And then there are sign-up bonuses. Large, one-off awards tied to card spend look less like rebates and more like incentives. In the U.S., this is why banks issue 1099s for some bonuses but not others, depending on how the reward is structured.

Still, for most people, most of the time, miles and points earned through normal travel and spend fall safely on the “not income” side of the line.

Here is where things get interesting.

Miles and points sit outside many of the traps that catch expats elsewhere. They are not accounts. They are not securities. They do not generate interest, dividends, or realised gains. They do not sit on a balance sheet in a way most tax systems recognise.

They also tend not to be reportable.

There is no FBAR equivalent for loyalty programmes. No CRS reporting. No annual statement that needs translating between jurisdictions. No mismatch between how two countries characterise the same asset.

For globally mobile people, that is rare.

Miles and points quietly sidestep a large amount of cross-border friction simply by not fitting neatly into existing tax categories.

This is not a claim that miles are “tax-free income”. They are not income at all, in the way the world usually understands it.

It also does not mean there are no edge cases. If you are generating points in a business context, monetising them, or treating them as compensation, the analysis changes. If you are converting points to cash equivalents at scale, expect questions.

But for ordinary personal use, loyalty programmes remain one of the few benefits that travel with you cleanly when you move countries.

There is an odd asymmetry here that expats eventually notice.

Cash is heavily scrutinised. Investments are categorised, reported, and reconciled across borders. Pensions require specialist advice just to avoid accidental non-compliance.

Miles and points, by contrast, sit in the background. They accumulate. They get used. They disappear. No forms. No declarations. No second-guessing.

That does not make them magical. It just makes them structurally different.

For expats used to every financial decision coming with a tax footnote, that difference is worth understanding.

Miles and points are not a loophole. They are not a hack. They are simply a category of benefit that tax systems have never felt the need to treat as income for personal use.

For globally mobile households, that makes them one of the few genuinely border-resilient perks left in modern finance.

Not because they are special. But because they do not fit anywhere obvious enough to cause trouble.