Residence vs Domicile: UK Tax After April 2025 and Which Applies to You

Residence vs domicile: the short answer

Residence is a tax-year test of where you physically spend your time and keep your ties; domicile is a general-law concept that links you to the legal system of the country you treat as your permanent home. Domicile is far stickier, and for UK tax it has been replaced by residence-based rules: the 4-year foreign income and gains regime replaced the remittance basis on 6 April 2025, and on the same date HMRC says the domicile and deemed domicile rules were replaced by new long-term UK resident rules for inheritance tax.

Issue	Tax residence	Domicile
What it measures	Days spent in the UK, homes, work and other ties in each tax year	The country a person treats as their permanent home under general law
How easily it changes	Can change from one tax year to the next	Hard to change; needs a settled intention to live elsewhere permanently
Role in UK income tax and CGT from 6 April 2025	Decisive: residents are taxed on worldwide income and gains unless the 4-year FIG regime applies	None as a connecting factor; the remittance basis has ended
Role in UK inheritance tax from 6 April 2025	Decisive: long-term UK residents (10 of the previous 20 tax years) bring overseas assets into charge	Mainly transitional, for people and trusts by reference to 30 October 2024 or earlier
Role in general law	Habitual residence is one of several jurisdiction tests	Still used for divorce jurisdiction, will validity and in many foreign systems

How UK tax residence is decided: the statutory residence test

Your UK tax residence for any tax year is decided by the statutory residence test (SRT), which works through automatic overseas tests, automatic UK tests and then a sufficient ties test. HMRC's RDR3 guidance note sets out the order: anyone in the UK for 183 days or more in the tax year is UK resident, with no need to consider any other test.

Below that threshold, you are automatically non-resident if you were UK resident in one or more of the previous 3 tax years and spend fewer than 16 days in the UK, or if you were resident in none of those years and spend fewer than 46 days here. A third test covers full-time work abroad. If no automatic test settles the answer, the sufficient ties test weighs your UK ties (family, accommodation, work, 90-day and, for recent residents, a country tie) against your UK days.

Days in the UK in the tax year	UK ties needed to be resident (resident in 1 or more of the previous 3 years)
16 to 45	At least 4
46 to 90	At least 3
91 to 120	At least 2
Over 120	At least 1

Our guide to how to become non resident for UK tax covers each test, split years and temporary non-residence.

What changed on 6 April 2025: domicile out, residence in

The direct answer is that a UK resident who is not domiciled in the UK can no longer shelter foreign income and gains offshore by not bringing them to the UK. The reform that abolished the non-dom regime and started the residence-based FIG regime put two reliefs in place of the remittance basis, both keyed to residence or past remittance basis use rather than domicile. The policy background is in our report on how Autumn Budget 2024 replaced the non-dom regime.

The 4-year foreign income and gains regime

The FIG regime gives new arrivals up to 4 tax years in which claimed foreign income and gains are not taxed in the UK. According to HMRC's eligibility guidance, you qualify if you are UK resident under the SRT and still within your first 4 years of UK residence following at least 10 years of non-residence. The 4 years run consecutively and unused years cannot be rolled forward. Eligible sources include overseas trading and property profits, dividends from non-UK companies and foreign bank interest. Foreign employment income is not covered, although Overseas Workday Relief may apply instead.

The relief has a price: a claim, made on the Self Assessment return, costs you the tax-free allowances for Income Tax and Capital Gains Tax.

The Temporary Repatriation Facility

The Temporary Repatriation Facility (TRF) lets former remittance basis users designate qualifying overseas capital, mainly pre-6 April 2025 foreign income and gains, and pay a flat charge instead of tax at normal rates. HMRC's manual on the TRF charge sets it at 12% of the amount designated in a return for 2025-26 or 2026-27, rising to 15% for 2027-28. The charge is a charge on capital, not income tax or capital gains tax.

The Budget 2026 overview of tax legislation and rates, published on 28 October 2026, lists no change to the FIG regime, the TRF or the long-term residence test. Its one residence-related measure is narrow: from 28 October 2026, no capital gains tax exit charge where a trust becomes UK resident only because a trustee moved to the UK and ceases to be resident later that year or the next.

Inheritance tax: the long-term residence test and the tail

For inheritance tax the question is now whether you are a long-term UK resident, not whether you are domiciled. Under section 6A of the Inheritance Tax Act 1984, you are a long-term UK resident for a tax year if you were UK resident for at least 10 of the previous 20 tax years. If you are, your non-UK assets may be within the charge on a transfer or on death.

Leaving does not end the status at once. The legislation requires a run of consecutive non-resident years, depending on how many of the last 20 years you were UK resident:

UK resident years out of the last 20	Consecutive non-resident years needed to lose the status
13 or fewer	3
14	4
15	5
16	6
17	7
18	8
19	9
20	10

HMRC's long-term residence guidance adds that the 10 out of 20 count resets after 10 consecutive years of non-residence. There are also transitional rules that still look back to domicile. A person who was neither UK domiciled nor deemed domiciled on 30 October 2024, is non-resident for 2025-26 and does not return will not be a long-term UK resident. Someone who was deemed domiciled on 30 October 2024 and is non-resident for 2025-26 stops being a long-term resident after 3 years of non-residence, provided they do not return. Our explainer on how long you need to live outside the UK to avoid inheritance tax works through examples of the tail.

Where domicile still matters

Domicile still matters wherever English general law, rather than the tax code, asks which legal system a person belongs to.

• Divorce jurisdiction. Under section 5(2) of the Domicile and Matrimonial Proceedings Act 1973, the courts of England and Wales can hear a divorce on several habitual residence grounds, or if both parties are domiciled in England and Wales, or if either party is. Our guide to international divorce covers forum and assets.
• Wills and succession. Under section 1 of the Wills Act 1963, a will is formally valid if it complies with the law of the place it was signed, or of the testator's domicile, habitual residence or nationality at signing or at death. Domicile therefore remains one of the routes to validity, and it is relevant to the choice-of-law questions in our piece on how to make an international will.
• Trusts and transitional tax rules. Inheritance tax protection for some settled property still depends on whether the settlor was non-UK domiciled when assets were added, and the transitional tests above turn on status on 30 October 2024.

Domicile also matters abroad. Other countries' tax and succession systems use their own connecting factors, and some still ask about domicile or nationality rather than days spent there. Settling your UK position does not settle the destination's, a point that comes up for families relocating under routes such as the UAE golden visa.

Dual residence and treaty tie-breakers

If two countries both treat you as tax resident, a double taxation agreement usually decides which one has the primary right to tax, and it does so with residence-based tie-breakers rather than UK domicile. HMRC's dual residents helpsheet HS302 gives the usual order: permanent home; if you have one in both countries, your centre of vital interests, where your social, domestic, political and cultural links are greater; then habitual abode; and finally nationality.

If the tie-breaker makes you treaty resident in the other country, you can usually claim relief from UK tax; if it makes you UK resident, you pay UK tax on worldwide income and gains. Two cautions apply. A treaty covers only the taxes it lists, and HMRC notes that the TRF charge, as a charge on capital, falls outside a convention limited to income and capital gains taxes. And treaty residence for income tax does not settle the inheritance tax position, which follows the long-term residence test.

Residence vs domicile: which applies to you

For UK tax in 2026-27, residence applies to almost everyone; domicile matters only in the situations below.

• You are arriving after 10 or more years abroad. Residence applies: check the SRT, then whether a FIG claim is worth the lost allowances.
• You used the remittance basis before April 2025. Residence applies, but consider the TRF at 12% for 2026-27 before it rises to 15%.
• You have lived in the UK for 10 of the last 20 tax years. Residence applies for inheritance tax, and your worldwide estate may be in charge until the tail ends.
• You were non-UK domiciled or deemed domiciled on 30 October 2024 and left before 2025-26. Domicile still matters, through the transitional rules.
• You have trusts settled while non-UK domiciled. Domicile at the time of settlement still matters for inheritance tax on those assets.
• You are divorcing, making a will or dealing with an estate across borders. Domicile matters under general law, alongside habitual residence and nationality.
• You are tax resident in two countries. The treaty tie-breakers apply, not domicile.

When to instruct a tax adviser

Instruct a tax adviser before you move, because most of the decisions above are time-limited or turn on day counts you cannot rewrite later. Advice pays most near an SRT threshold, on a FIG claim or TRF designation, with offshore trusts, or close to the 10 of 20 line. You can find specialists through our tax adviser directory, including UK tax advisers who handle residence and inheritance tax planning.

For family or estate questions, a family and private client lawyer usually leads, with wealth management advisers on structures like those in our guide to setting up a family office, or browse advisers in the United Kingdom.

Frequently asked questions

What is the difference between residence and domicile?

Residence is decided each tax year under the statutory residence test, from UK days and ties. Domicile is a general-law link to the country you treat as your permanent home and is much harder to change. Since 6 April 2025 UK tax relies on residence, not domicile.

Does domicile still matter after April 2025?

For UK tax, mainly in transitional cases tied to status on 30 October 2024 and trusts settled while the settlor was non-UK domiciled. Outside tax, it still matters for divorce jurisdiction in England and Wales, the formal validity of wills and how other countries treat you.

What is the 10 out of 20 year rule for inheritance tax?

You are a long-term UK resident for a tax year if you were UK resident for at least 10 of the previous 20 tax years. Long-term residents may pay inheritance tax on overseas assets. After leaving, the status continues for 3 to 10 tax years, depending on how long you lived in the UK.

Who can claim the 4-year FIG regime?

UK residents within their first 4 tax years of residence after at least 10 years of non-residence. Claimed foreign income and gains are not taxed in the UK, but you lose the Income Tax and Capital Gains Tax allowances.

What is the Temporary Repatriation Facility rate?

The TRF charge is 12% of qualifying overseas capital designated for 2025-26 or 2026-27 and 15% for 2027-28. It is open to former remittance basis users, and designated amounts can then be brought to the UK without further tax.

Can I be tax resident in two countries?

Yes. A double taxation agreement then usually applies tie-breakers in order: permanent home, centre of vital interests, habitual abode and nationality. If the treaty makes you UK resident you pay UK tax on worldwide income and gains; if not, you can usually claim relief.

Sources

1. HMRC, Check if you can claim the 4-year foreign income and gains regime: gov.uk
2. HMRC, Remittance Basis and Domicile Manual RDRM73400, Temporary repatriation facility: TRF charge: gov.uk
3. HMRC, Inheritance Tax if you're a long-term UK resident: gov.uk
4. Inheritance Tax Act 1984, section 6A (long-term UK resident): legislation.gov.uk
5. HMRC, RDR3: Statutory Residence Test (SRT) notes (updated 11 June 2026): gov.uk
6. HMRC, Dual residents (Self Assessment helpsheet HS302, 2026): gov.uk
7. Domicile and Matrimonial Proceedings Act 1973, section 5: legislation.gov.uk
8. Wills Act 1963, section 1: legislation.gov.uk
9. HM Treasury and HMRC, Budget 2026: overview of tax legislation and rates (28 October 2026): gov.uk

About this article

This guide was researched and written by The Corporate INTL Newsroom, which covers cross-border legal, regulatory and business developments for lawyers, professional advisers and financiers in over 150 jurisdictions. It has been checked against HMRC guidance and manuals, the Budget 2026 overview of tax legislation and UK legislation. It is general information, not legal or tax advice; for advice on your own residence, domicile or inheritance tax position, consult a qualified adviser. Last reviewed 4 November 2026. For more analysis like this, visit the Corporate INTL newsroom or subscribe to Corporate INTL.