From 6 April 2025 the previous tax rules for non-UK domiciled individuals (or ‘non-doms’ for short) came to an end. Domicile has been replaced instead with a system based on tax residence.
These new rules apply to non-doms already resident in the UK and to those moving to the UK after at least 10 years overseas.
The current remittance basis of taxation is abolished in the UK from 6 April 2025 for UK non-doms. This is replaced with a new 4 year foreign income and gains (‘FIG’) regime for individuals who become UK tax resident after 10 years of non-UK residence. Qualifying individuals can elect not to pay tax on foreign income in the first 4 years after becoming UK tax resident and they will be able to bring this income into the UK free from any additional charges. After individuals have been resident in the UK for 4 tax years they will be taxed on their worldwide income and gains.
Under the previous system, non-doms were only within scope for inheritance tax on assets in the UK. The new residency based system will bring all individuals within the scope of inheritance tax on worldwide assets after being resident in the UK for 10 years. Individuals will also continue to be subject to UK inheritance tax on their worldwide estate for 10 years after becoming non-UK resident.
Written by Jane Cowdrey, Director, Solicitor and Head of the Wills & Probate Department.
Email: jcowdrey@anthonyking.co.uk
