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Non Domicile Status UK
Dom or Non Dom Status
If you need help planning your tax liability when you are non-domicile and UK Resident or have questions about the Remittance Basis, you can call our office for specialist advice about your personal circumstances. Read our FAQ for non dom status understanding.
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Non Domicile Status UK
Non-Domiciled status allows individuals who live in the UK but have a foreign domicile to limit their UK tax exposure on overseas income. Recent UK tax reforms have ending permanent Non-Dom status, limiting the remittance basis to a maximum of four years. These changes aim to increase fairness and close loopholes. Affected individuals should review residency and remittance claims with a professional tax adviser promptly.
remittance basis on FIG
The updated Non-Dom rules impact how the remittance basis applies to foreign income and gains (FIG). After four years of UK residence, individuals lose access to the remittance basis and must report and pay UK tax on all worldwide income, regardless of whether it is brought into the UK or not. Transitional rules may help mitigate the impact, but long-term Non-Doms should now consider restructuring overseas wealth and exploring full UK tax planning strategies.
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What changed in non-domiciled tax rules from April 2025?
From April 2025, the UK eliminated the traditional non-domicile (non-dom) regime and its remittance basis. In its place, a four-year tax window was introduced for new UK residents: during their first four full tax years, foreign income and gains (FIG) can be brought into the UK without UK tax, even if paid offshore. After that, all worldwide income and gains become taxable on the arising basis.
This removes the indefinite remittance regime and its annual charges. Existing non-doms or new residents must now closely monitor their UK presence. The Transitional “Temporary Repatriation Facility” and rebasing relief offer limited support for historic offshore wealth. The underlying message is clear: UK tax is now firmly residence-based rather than domicile-based. You’ll need a clear exit strategy or restructure to manage offshore assets. Professional advice is essential for building compliant, tax-efficient structures and ensuring your move to the UK aligns with your broader financial plans.
Who qualifies for the new four-year foreign income and gains (FIG) exemption?
To qualify, you must be a new UK tax resident who hasn’t been a UK tax resident for at least 10 consecutive tax years. Your four-year FIG exemption begins with the first full tax year after arrival. During this phase, foreign income and gains—such as overseas business profits, dividend income, or capital gains—are exempt from UK tax, even if they are transferred to the UK.
This regime was introduced to replace the unpopular remittance basis, offering simplicity and clarity for newcomers. It applies to all foreign income, not just earnings, and encourages long-stay planning. Travelling abroad resets the clock—once you become eligible, your four-year allowance remains intact even if you leave temporarily.
After the four-year window, you become fully taxable on worldwide income and gains. To use this benefit strategically, coordinate the timing of business profits, foreign investments, and UK arrival. Effective pre-residence planning can help maximize your tax position during this limited period.
What is the Temporary Repatriation Facility (TRF), and how does it work?
The Temporary Repatriation Facility (TRF) is transitional relief for individuals affected by the end of the remittance basis. It allows qualifying non-doms to bring offshore funds, income, or gains into the UK at reduced tax rates of 12 per cent in 2025/26 and 15 per cent in 2026/27.
The TRF applies only to foreign income or property gains accrued before April 2025. Any foreign funds brought into the UK outside this window or generated after April 2025 don’t qualify. There is also a record-keeping requirement: you need to note the origin, value, and timing of the funds to claim the lower rate.
Using the TRF is optional. Claiming it allows you to tidy up historic offshore wealth with lower tax, but it requires careful calculation and timing. Since this relief is time-limited, now is the moment to bring funds onshore if it fits your wider estate or investment strategy. A tax planner can help identify eligible assets and effectively leverage TRF before the relief phases out.
How does the new CGT rebasing from April 2017 affect me?
Under the 2025 non-dom reforms, Capital Gains Tax (CGT) rebasing allows eligible individuals to reset the base cost of offshore assets to their market value on 5 April 2017. This means that gains accrued before that date are effectively ignored when calculating capital gains tax (CGT) on disposal.
To qualify, you must have held the asset since April 2017 and have used the remittance basis before its abolition. The relief applies only once per asset. Any gains post-2017 remain taxable. This rebasing offers a significant CGT advantage on the sale of foreign real estate, stock, or business. It removes historic gain, reducing your UK liability significantly.
The practical application requires asset valuations for April 2017 and proof of continued ownership. Disposals must be reported on your Self-Assessment return from April 2025 onwards. Rebasing can save tens or hundreds of thousands of dollars in CGT, especially on long-held properties or investments. Before selling, work with a specialist to confirm rebasing eligibility, gather the necessary evidence, and integrate it into your wider estate and inheritance tax planning.
When do I become deemed a UK resident for Inheritance Tax (IHT) purposes?
Under the new residence-based IHT regime, a person becomes subject to IHT on their worldwide assets after 10 years of UK tax residence, starting in April 2025. This replaces the old domicile-based regime. Once deemed a UK resident for Inheritance Tax (IHT) purposes, you face lifetime and death estate tax on your worldwide assets.
The regime also includes a 10-year tail: if you leave the UK after becoming an IHT resident, you remain within scope for a period of ten years. This prevents people from escaping IHT with a brief residency before death. The rules also disrupt certain offshore trusts. Previously excluded assets could now be captured once you become an IHT resident.
To reduce risk, early planning is essential—review trust arrangements, asset locations, and timing of residency. Proper trust restructuring or asset transfers made prior to reaching IHT-resident status can help prevent large IHT bills. A specialist adviser is invaluable in designing compliant estate strategies under the new regime.
How does the new residence-based IHT regime work, and what is the "tail" period after leaving?
With the move to a residence-based IHT model, UK tax exposure begins after 10 years of UK residence—previously based on domicile. Once in scope, your global assets are subject to IHT, and the rule continues even after departure: a 10-year “tail” means you remain liable if assets are held or wealth is transferred within a decade of leaving the UK.
A clean departure doesn’t reset tax status. Even if you move elsewhere, disposals or receipts made within those 10 years can still incur UK IHT. Planning should consider domicile, trust rules, and timing of residency.
Removal of domicile means that trusts you’ve created before becoming an IHT resident may now be taxed. Effective planning requires restructuring trust, asset transfers, or trust dissolutions to limit exposure before reaching the 10-year threshold. Beware the tail: moving out may not avoid UK IHT if you return funds or dispose of assets within ten years of residency.
Will the removal of the remittance basis end non-dom benefits forever?
The April 2025 reforms eliminate the remittance basis and its associated benefits, but transitional reliefs are in place. The four-year FIG regime, TRF, and CGT rebasing are temporary measures that soften the transition, not permanent replacements. Once these windows close, UK taxation of worldwide income and gains will be universal for residents—there will be no ongoing offshore carve-outs based on domicile. Future reforms may introduce other incentives, but nothing currently parallels the old non-dom regime.
For individuals with long-term offshore structures, planning now is critical. You may need to bring assets onshore, restructure trusts, reassess investment jurisdictions, or plan residence timing. A final opportunity to use favourable rules—or exit before tax increases—may exist, so timely action is essential.
How do the reforms affect offshore trusts and protected income?
Offshore trusts and protected income arrangements are hit hard by the 2025 regime. Trusts established while you were non-domiciled may have enjoyed partial exemptions, but once you become a UK tax resident—especially after 2025—they can lose protection.
Trust assets are often subject to opaque new charges or full inclusion in your taxable estate. Distributions to UK-resident beneficiaries may bring tax charges. If trusts include ongoing income, the arrival of new funds could be deemed remittance.
Reviewing trust terms and control is essential before the remittance basis is abolished. Options include relocating the trust situs, restructuring the terms, or winding up the trusts prior to triggering tax. Specialist legal and tax advice is key to preserving wealth and reducing uncertainty from outdated offshore structures.
Does the new system end overseas workday relief, and what are the £300k/30% caps?
These reforms eliminated portions of Overseas Workday Relief, which previously allowed UK residents working abroad to exclude some income. Income up to £300,000 per annum or 30% of income could be exempt. But this relief has largely been withdrawn under the new domicile-based system.
Under the new regime, all foreign-sourced employment income becomes taxable following the four-year FIG period. The previous caps do not apply—unless you qualify for transitional exemptions.
If you work abroad for your UK employer, you must declare the income and pay UK tax after the grace period. Any withholding tax paid overseas may be creditable; however, reduced relief could result in unexpectedly high UK bills. To manage this effectively, you’ll want focused planning—but the old thresholds no longer offer protection.