Non-Dom Abolition: What Actually Happened in April 2025

For decades, the UK's non-domicile tax regime was one of the most powerful tools available to internationally mobile individuals. From April 2025, that changed fundamentally. The Labour government followed through on its 2024 manifesto commitment and replaced the old regime with a residence-based framework — one that is, in several respects, more restrictive than anything that came before.

This guide explains what happened, in plain English, for a general financial audience. It is not a substitute for professional tax advice — if you are affected, you should speak to a qualified adviser as a matter of urgency.

What Was the Old Non-Dom Regime?

Under the previous rules, individuals who were UK-resident but non-UK domiciled (broadly: those whose "permanent home" was considered to be outside the UK) could elect to pay UK tax only on income and gains they remitted to the UK — a concept known as the remittance basis. Foreign income and gains left offshore were untouched by HMRC.

This regime was particularly valuable for those with significant offshore wealth. The key trade-off was losing the personal allowance and CGT annual exempt amount in years when the remittance basis was claimed, but for those with large foreign incomes, this was often worth it. After seven years of UK residence the Remittance Basis Charge was £30,000 per year, rising to £60,000 after twelve years; after 15 years of UK residence (when individuals became "deemed domiciled"), the remittance basis was no longer available at all.

What Changed on 6 April 2025?

The remittance basis was abolished on 6 April 2025. It was replaced with a new, residence-based system. The key elements are as follows.

The Foreign Income and Gains (FIG) Regime

New arrivals to the UK — those who have not been UK-resident in any of the previous 10 tax years — now qualify for a four-year exemption on foreign income and gains. Under the FIG regime, qualifying individuals can bring foreign income and gains to the UK free of UK tax for their first four tax years of UK residence.

This is a significant shift from the old system in two ways. First, it is automatic and available to all new arrivals, regardless of domicile. Second, it lasts only four years, compared with the far longer run available under the old remittance basis.

After four years, all worldwide income and gains become taxable in the UK in the normal way. There is no halfway house, no ongoing "remittance basis" election, no mechanism to shelter foreign income indefinitely.

For those who previously relied on the remittance basis well beyond four years — particularly those who had been resident for 10–17 years — this represents a substantial increase in UK tax exposure.

The Temporary Repatriation Facility (TRF)

A pragmatic concession was included in the reforms: the Temporary Repatriation Facility. This allowed individuals who had previously accumulated foreign income or gains on the remittance basis (pre-6 April 2025) to bring those funds to the UK at a preferential tax rate during a limited window.

The TRF is intended to encourage the repatriation of offshore funds that would otherwise have remained locked out of the UK to avoid a tax charge. The rates under the TRF are materially lower than the normal income tax or CGT rates that would otherwise apply, making it an attractive option for those with older offshore accumulations.

The window is time-limited. If you have pre-April 2025 foreign income or gains that you have kept offshore, you should take advice on whether the TRF is worth using before the facility closes.

The Long-Term Resident IHT Test

Perhaps the most significant change — and the one that received the least coverage in the financial press — concerns inheritance tax.

Under the old rules, IHT depended primarily on domicile. UK-domiciled individuals paid IHT on their worldwide estate; non-domiciled individuals paid IHT only on their UK-situs assets. The concept of "deemed domicile" meant that after 15 years of UK residence, individuals became subject to UK IHT on worldwide assets — but this was tied to domicile, not purely residence.

From April 2025, IHT exposure for internationally mobile individuals is determined by a new "Long-Term Resident" test. Broadly, individuals who have been UK-resident for 10 or more of the previous 20 tax years will be treated as long-term UK residents for IHT purposes, and their worldwide assets will be within scope of UK IHT.

The key difference from the old deemed-domicile rules is the "tail" — the period during which you remain exposed to UK IHT after leaving the UK. Under the new rules, a long-term resident who leaves the UK will remain within scope of UK IHT for a period that depends on how many years they were UK-resident. Those who were resident for 20 years could face a "tail" of up to 10 years after departure before their non-UK assets fall out of the UK IHT net.

This is a critical planning consideration for anyone who is (or has been) a long-term UK resident and is now living abroad.

Who Is Most Affected?

The reforms have the widest impact on three groups.

Long-term non-doms who remained in the UK. Those who had been using the remittance basis for many years and planned to continue doing so will now face UK tax on worldwide income and gains. Many in this group will need to restructure.

Individuals who left the UK before April 2025 but have been long-term residents. Even if you emigrated before the reforms, if you were a long-term UK resident you may still face UK IHT exposure on your worldwide estate for a number of years — the "tail" described above. This is not widely understood and is causing considerable concern among advisers.

New arrivals who planned to use the remittance basis from day one. Those who moved to the UK expecting a long-term non-dom advantage will find the new FIG regime significantly less flexible. Four years is short, and planning needs to begin before the window closes.

What Should You Do?

If you are in any of the affected groups, the most important action is to seek professional tax advice promptly. The reforms are complex, the transition rules require careful analysis, and the window for some opportunities (including the TRF) is limited.

Specific steps worth considering include:

• Reviewing your UK tax position in light of the new rules
• Assessing whether the TRF is worth using for any pre-April 2025 offshore accumulations
• Reviewing your estate planning in light of the new long-term resident IHT test
• If you have left the UK, understanding your IHT "tail" period
• Considering whether structures such as trusts, which remain relevant in the new regime, can play a role in your planning

The changes are significant, but they are also manageable with proper advice. The worst outcome is to do nothing and discover, too late, that a substantial tax liability has arisen.

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This article provides general information only and does not constitute financial or tax advice. Tax rules are complex and change frequently. The value of tax reliefs depends on individual circumstances. You should seek qualified, independent advice before taking any action. Global Investments is an international wealth management group. To speak with one of our advisers about your personal situation, contact us.

How Global Investments Can Help

Global Investments has worked with internationally mobile individuals on complex tax planning matters for over 32 years. Our advisers work across jurisdictions, helping clients understand their exposure under the new non-dom rules and develop appropriate planning strategies — including use of the Temporary Repatriation Facility, estate planning in light of the long-term resident IHT test, and portfolio restructuring.

We are not a UK tax practice — we work with specialist tax lawyers where detailed UK tax advice is required — but we can coordinate the full picture across wealth management, structuring, and international planning. If you have been affected by the April 2025 reforms, we would be pleased to arrange an initial conversation.