The UK non-dom regime is gone. Here is what replaced it.
After more than two centuries, the UK abolished the non-domiciled tax status from 6 April 2025. The replacement is a four-year relief for new arrivals and a transition facility for everyone else.
From 6 April 2025, the UK’s non-domiciled tax status no longer exists. The remittance basis, which allowed individuals with a foreign domicile to avoid UK tax on overseas income and gains as long as those funds stayed outside the country, is finished. In its place: a shorter, narrower system called the Foreign Income and Gains (FIG) regime, and a time-limited facility for bringing old money in at a reduced rate.
The change had been signalled for years but confirmed in the 2024 Autumn Budget. It is the largest shift in the taxation of internationally mobile individuals in the UK since the non-dom system was introduced over two hundred years ago.
What the FIG regime does
Qualifying new arrivals to the UK can claim 100 per cent relief on foreign income and gains for their first four tax years. To qualify, an individual must have been non-UK-resident for at least ten consecutive years before arriving. After the four-year window closes, they are taxed on worldwide income and gains like everyone else.
The old regime had no fixed time limit: individuals could claim the remittance basis for years, even decades, provided they paid an annual charge after a certain point. The FIG regime caps the benefit at four years, full stop.
The transition
For people who were already claiming the remittance basis, the government has introduced a Temporary Repatriation Facility (TRF). This allows pre-2025 foreign income and gains to be brought into the UK at a flat rate of 12 per cent in the 2025/26 and 2026/27 tax years, rising to 15 per cent in 2027/28.
That 12 per cent rate is designed to be attractive enough to bring money onshore rather than leaving it stranded abroad or encouraging its owners to leave the country altogether. Whether it will work is an open question. Plenty of advisers think the rate is too high for clients who were already planning to move.
Inheritance tax
Domicile is also being removed as the basis for UK inheritance tax. From April 2025, the test is whether someone has been UK-resident for at least ten of the previous twenty tax years. If they have, their worldwide assets fall within the scope of UK IHT, regardless of where they consider their domicile to be.
For families who structured around the old domicile rules, using excluded property trusts or offshore holding structures, this is a significant change. Trusts that were set up on the assumption that the settlor’s non-UK domicile would keep assets outside IHT may no longer work as intended.
Capital gains rebasing
One concession: individuals who claimed the remittance basis at least once between 2017/18 and 2024/25 can rebase foreign assets to their value on 5 April 2017 for capital gains purposes. That removes the accrued gain up to that date, which is a meaningful benefit for anyone holding long-held overseas investments.
The departures question
Henley & Partners projected that 16,500 millionaires would leave the UK in 2025. A Bloomberg analysis of Companies House filings found a 75 per cent increase in director departures in April 2025 compared to the same month in 2024. Between the October 2024 Budget and July 2025, 3,790 company directors left the UK, a 40 per cent increase year on year.
HMRC will not have official data on departing former non-doms until January 2027, when self-assessment returns for 2025/26 are filed. Until then, the scale of the exodus is a matter of projection and anecdote.
What is not in dispute is the direction. A significant number of internationally mobile families are restructuring around the UK rather than through it. Whether the FIG regime attracts enough new arrivals to offset the departure of existing non-doms is a question that will take several years to answer.
