The end of the UK Non-Dom Regime: Key changes from April 2025
Alan Rajah
by Alan Rajah
As of 06 April 2025, the UK has abolished domicile-based taxation, transitioning to a residence-based system. All UK residents are now subject to UK tax on their worldwide income and gains as they arise, marking the end of the remittance basis and essentially reshaping the tax landscape for internationally mobile individuals.
To ease transition, a 4-year Foreign Income and Gains (FIG) regime now exempts foreign income and gains from UK tax for new UK arrivals who have been non-UK tax residents for the past 10 years. This relief must be claimed via Self-Assessment and will expire after four years, after which worldwide taxation applies.
For those who previously used the remittance basis, a Capital Gains Tax (CGT) rebasing election allows foreign assets to be rebased to their market value as of 05 April 2017, ensuring only post-2017 gains are taxed. This applies to individuals who claimed the remittance basis between 2017/18 and 2024/25 and were not deemed domiciled before 2025.
A Temporary Repatriation Facility (TRF) permits pre-2025 untaxed foreign income and gains to be remitted at 12% in 2025/26 and 2026/27, increasing to 15% in 2027/28. After April 2028, all remittances will be taxed at standard rates.
The abolition of offshore trust protections means that, as of April 2025, foreign income and gains in settlor-interested offshore trusts are taxed on UK resident settlors as they arise. Beneficiaries are also taxed on trust distributions unless covered by the 4-year FIG regime.
The Overseas Workday Relief (OWR) has been extended to four years and will no longer require earnings to remain offshore. However, relief is capped at GBP 300,000 or 30% of qualifying employment income, whichever is lower.
Business Investment Relief (BIR), which allowed non-doms to invest untaxed offshore funds in UK businesses, will end for new claims after April 2028. Existing BIR investments remain valid, and unremitted BIR funds can still be repatriated under the TRF.
From 06 April 2025, all UK residents are taxed on worldwide income and gains, with pre-2025 foreign income remitted to the UK now taxed in full, unless covered by the TRF. The UK has also adopted a residence-based IHT system, where individuals UK-resident for at least 10 of the past 20 years are now liable for IHT on their worldwide assets. Upon leaving the UK, IHT liability will phase out over 3 to 7 years. Offshore trusts no longer offer IHT protection unless the settlor is not long-term UK resident.
The abolition of the non-dom regime marks a major shift in UK taxation. While transitional reliefs, including the 4-year FIG exemption and TRF, provide short-term mitigation, affected individuals must act swiftly to review tax planning, restructure trusts and investments, and assess long-term UK residency implications. With worldwide taxation now the norm, proactive planning remains essential.
Lawrence Grant LLP, Chartered Accountants provides audit, accounting, tax, business advisory, and cross-border tax advice. They are focused on providing business solutions to clients to enable them to grow their businesses both in the UK and overseas. In an era of digital transformation, the firm offers a selection of cloud and digital software solutions using AI technology.
GGI member firmLawrence Grant LLP, Chartered AccountantsLondon, UKT: +44 20 8861 7575
Advisory, Auditing and Accounting, Fiduciary & Estate Planning, and Tax
Alan Rajah is the managing partner of Lawrence Grant LLP. He is involved in all areas of general practice, specialising in cross border tax planning, due diligence, mergers and acquisitions and inheritance tax planning. His client portfolio includes UK and overseas companies and individuals. Alan is the Global Vice Chair of the GGI International Tax Practice Group and a Trustee of British Foundation for International Reconstructive Surgery & Training (BFIRST).Contact Alan.
