Since 6 April 2025, the UK’s non-dom tax regime has been abolished, marking a significant shift in the tax landscape for non-domiciled individuals and British expatriates returning to the UK.

This transition means that worldwide taxation will apply to all UK residents, ending the long-standing remittance basis and changing the way foreign income and gains are taxed.

Understanding these changes is essential for individuals who currently benefit from non-dom status.

This quick guide provides a breakdown of the key reforms, who they affect, and what steps you should take before the deadline.

Key changes at a glance:

• Worldwide taxation for all UK residents – From 6 April 2025, UK residents will be taxed on their global income and gains, removing the ability for non-doms to defer tax on foreign income by keeping it offshore.
• Abolition of the remittance basis – The option to be taxed only on UK income and any foreign income brought into the UK will no longer be available.
• Four-year foreign income & gains (FIG) regime – A tax relief scheme for those moving to the UK after ten years of non-residence. This allows certain individuals to claim relief on non-UK income and gains for up to four years.
• Capital gains tax (CGT) rebasing – Non-doms who have used the remittance basis between 2017/18 and 2024/25 may qualify for asset rebasing to 5 April 2017 values, reducing their taxable capital gains.
• Temporary Repatriation Facility (TRF) – A limited-time opportunity to bring offshore funds into the UK at reduced tax rates of 12 per cent in 2025/26 and 2026/27, and 15 per cent in 2027/28.
• Inheritance Tax (IHT) changes – A shift to a residence-based system from 6 April 2025, meaning domicile status will largely become irrelevant for IHT purposes.

Who is affected?

These reforms affect a wide range of individuals, including:

• Current non-domiciled UK residents – Those who previously benefitted from the remittance basis will now be taxed on their worldwide income and gains.
• Returning expatriates – British nationals who have been non-UK resident for ten consecutive years may qualify for the FIG regime but will eventually be subject to full UK taxation.
• Wealthy individuals with offshore assets – Anyone holding significant foreign investments should consider the implications of CGT rebasing and the TRF.
• Individuals with offshore trusts – Trust structures may require review due to changes in how gains are taxed.

What you need to do now

Here are the steps you should consider:

1. Review your tax position – Assess how the end of the non-dom regime will impact your personal and financial situation.
2. Assess offshore assets – Consider whether restructuring your wealth or making use of CGT rebasing could reduce tax liabilities.
3. Plan repatriation – If you have offshore funds, determine whether the TRF provides an opportunity to remit funds at a lower tax rate.
4. Consider relocating – If the UK’s new tax rules significantly increase your liabilities, you may wish to evaluate whether remaining in the UK is the best financial choice.
5. Seek professional advice – Given the complexity of the changes, expert tax advice is essential to avoid unexpected tax bills and ensure compliance.

If you have concerns about these upcoming changes or require tax advice, please speak to our team today.