UK Non-Dom Regime Abolished as Residence-Based FIG Regime Begins

The 4-year FIG regime

New arrivals to the UK can claim 100% relief on eligible FIG for their first four years of UK tax residence, provided they were not UK tax resident in any of the ten tax years immediately before arrival. Former remittance basis users who do not qualify pay tax on newly arising FIG in the same way as other UK residents, and FIG that arose before 6 April 2025 under the remittance basis remains taxable if remitted to the UK. The protection for FIG arising in settlor-interested trust structures is also no longer available to settlors outside the 4-year regime.

Transitional reliefs

• Temporary Repatriation Facility: former remittance basis users can designate pre-April 2025 FIG for three tax years from 6 April 2025, paying tax at 12% in 2025 to 2026 and 2026 to 2027 and 15% in 2027 to 2028. Designated amounts are not otherwise charged to UK tax when remitted.
• Capital gains rebasing: current and past remittance basis users can, if conditions are met, rebase personally held foreign assets to their value at 5 April 2017.
• Overseas Workday Relief: retained, with eligibility based primarily on eligibility for the 4-year FIG regime.

Inheritance tax

Whether non-UK assets are within the scope of UK inheritance tax now depends on whether an individual has been UK resident for at least 10 of the last 20 tax years before the chargeable event. Individuals who leave remain in scope for a period afterwards, shortened for those resident between 10 and 19 years. For trusts, non-UK settled property will only be excluded property at times when the settlor is not long-term resident, ending the previous approach of fixing status when assets were added.

Who is affected

Internationally mobile individuals and families, their trustees and family offices are most affected. Those who previously claimed the remittance basis should consider the Temporary Repatriation Facility window, while trustees of offshore structures should review the inheritance tax position of long-term resident settlors. The full package of documents is available on the GOV.UK publication page.

Sources

• HM Treasury and HMRC: Technical Note, Reforming the taxation of non-UK domiciled individuals (October 2024)
• GOV.UK: Changes to the taxation of non-UK domiciled individuals