What is non-domicile tax status UK?

Non-domicile (non-dom) status means you're a UK tax resident but your permanent home (domicile) is considered to be abroad. Historically, non-doms could choose to be taxed on a 'remittance basis' — only paying UK tax on foreign income and gains when they brought them into the UK. This allowed wealthy individuals to shelter overseas income from UK tax.

When is non-dom status being abolished?

The non-dom tax regime is being abolished from April 2025. It's being replaced with a new residence-based system. New arrivals to the UK will get a 4-year tax exemption on foreign income and gains (the FIG regime). After 4 years, they'll be taxed on worldwide income like everyone else. Existing non-doms lose their remittance basis.

What replaces non-dom status?

A new Foreign Income and Gains (FIG) regime. If you've been non-UK resident for 10+ consecutive years and then move to the UK, you get 4 years where foreign income and gains aren't taxed (regardless of whether you bring them to the UK). After 4 years, you're taxed on worldwide income. There's also a Temporary Repatriation Facility for existing non-doms to bring in old overseas income at reduced rates.

How does this affect inheritance tax for non-doms?

From April 2025, inheritance tax (IHT) rules are changing to a residence-based system too. After being UK resident for 10 years, your worldwide assets will be subject to UK IHT — regardless of domicile. When you leave the UK, it takes 10 years of non-residence before worldwide assets fall out of UK IHT scope. This is a major change from the domicile-based system.

Non-Domicile Tax Status Changes UK — What's Happening and Who's Affected | PocketWise

The UK’s non-domicile tax regime — which allowed wealthy residents with foreign domicile to shelter overseas income from UK tax — is being replaced from April 2025. This is one of the most significant tax changes in decades.

What Is Non-Dom Status?

Concept	Explanation
Domicile	Your permanent home — usually inherited from your father at birth
Tax residence	Where you’re physically resident for tax purposes
Non-dom	UK tax resident, but domiciled (permanent home) abroad
Remittance basis	Only pay UK tax on foreign income/gains brought into the UK
Arising basis	Pay UK tax on worldwide income (what most UK residents pay)

How the Old System Worked

UK residence period	Remittance basis charge
Under 7 of last 9 years	Free
7 of last 9 years	£30,000/year
12 of last 14 years	£60,000/year
15 of last 20 years	Deemed domiciled — lose non-dom benefits

The New System (From April 2025)

Foreign Income and Gains (FIG) Regime

Feature	Detail
Who qualifies	Anyone who has been non-UK resident for 10+ consecutive years before arriving
Duration	4 years from becoming UK resident
What’s exempt	Foreign income and foreign gains — not taxed in the UK
Remittance	Can bring foreign income/gains to the UK tax-free during the 4 years
After 4 years	Taxed on worldwide income like any other UK resident
Cost	No annual charge — it’s free for 4 years

Comparison: Old vs New

Feature	Old non-dom regime	New FIG regime
Qualification	Domicile abroad (often inherited)	10+ years non-UK residence before arrival
Duration	Up to 15 years (with charges)	4 years only
Annual charge	£30,000–£60,000	None
Foreign income treatment	Untaxed if not remitted	Untaxed for 4 years (then worldwide)
Can bring money to UK?	Only if willing to pay tax	Yes — tax-free for 4 years
After time limit	Deemed domiciled (worldwide tax)	Worldwide tax

Transitional Arrangements

Temporary Repatriation Facility (TRF)

For existing non-doms with overseas income/gains from before April 2025:

Year	Tax rate on repatriated income
2025/26	12%
2026/27	12%
2027/28	15%
After 2027/28	Full UK tax rates

This allows existing non-doms to bring historic overseas wealth into the UK at a significantly reduced rate during the transition period.

CGT Rebasing

Feature	Detail
What	Existing non-doms can rebase the value of foreign assets to their 5 April 2017 value
Effect	Only gains after that date are taxable when assets are sold
Who benefits	Non-doms with large gains built up before April 2017

Inheritance Tax Changes

Feature	Old rules	New rules (from April 2025)
Basis	Domicile — non-UK domiciled = only UK assets taxed	Residence — 10-year look-back
When worldwide assets taxed	Only if UK domiciled or deemed domiciled	After 10 years of UK residence
Leaving the UK	Worldwide assets fall out of IHT after 3 years	Falls out after 10 years of non-residence
Excluded property trusts	Foreign assets in trust shielded from IHT	No longer fully protected

IHT Tail Period

When you leave the UK, your worldwide assets remain in scope for IHT based on how long you were resident:

Years of UK residence	IHT “tail” after leaving
Under 10 years	3 years
10–13 years	3 years
14 years	4 years
15 years	5 years
20+ years	10 years

Who Is Affected?

Group	Impact
Existing long-term non-doms	Lose remittance basis — now taxed on worldwide income
Wealthy new arrivals	4-year FIG regime (shorter than old system but free)
Non-dom trust structures	IHT protection reduced — review trusts urgently
Short-term visitors (under 4 years)	May benefit from clearer, free FIG regime
Born in UK, returned	Generally can’t use FIG if originally UK-domiciled
UK residents (domiciled)	No change — already taxed on worldwide income

What Should Affected People Do?

Action	Who	When
Review trust structures	Existing non-doms with offshore trusts	Now
Consider TRF	Non-doms with historical overseas income	2025–2028
CGT rebasing election	Non-doms with pre-2017 foreign assets	At point of sale
IHT planning	Anyone near the 10-year residence threshold	Now
Seek specialist tax advice	Everyone affected	Immediately
Review residency plans	Those considering leaving the UK	Before decisions are finalised

Summary

Change	Detail
Non-dom status	Abolished from April 2025
Replacement	4-year FIG regime for new arrivals (10+ years non-resident)
Transition	TRF: bring in old money at 12%–15% (2025–2028)
CGT	Rebasing to April 2017 values available
IHT	Moving to residence-based system with 10-year look-back
Trust protection	Significantly reduced
Key action	Take specialist tax advice