UK Non-Dom Status: What It Was, What Replaced It, and What Your Options Are Now

What the Old Non-Dom Regime Allowed

Under the old regime, individuals resident in the UK but domiciled outside it could elect to pay UK tax only on foreign income and gains they actually 'remitted' (brought into or used in) the UK. This remittance basis election was available for the first seven years for free; a Remittance Basis Charge of £30,000 applied from year 8, rising to £60,000 from year 13. The old regime was widely used by wealthy international individuals based in London.

• Remittance basis: tax only on UK income/gains and foreign income/gains brought to the UK
• Years 1-7: free to use; no charge for remittance basis election
• Years 8-12: £30,000 annual charge for remittance basis
• Years 13+: £60,000 annual charge; from year 16, the individual became deemed domiciled and lost the election entirely

The New FIG Regime: What Replaced It

From 6 April 2025, the domicile concept has been removed from UK income tax, capital gains tax, and inheritance tax. In its place, a new Foreign Income and Gains (FIG) regime applies for the first four years of UK tax residency. Under FIG, new UK residents who have not been UK tax resident for the preceding 10 years can elect to exclude foreign income and gains from UK tax, without any charge, for the first four years.

After four years, the individual is taxed on worldwide income and gains like any other UK resident. The FIG regime is significantly less generous than the old non-dom regime: four years of relief instead of up to 15, and no ability to extend through a charge.

• Eligible: individuals who have not been UK tax resident in any of the preceding 10 tax years
• Relief: foreign income and gains are exempt from UK tax during the four-year FIG period, with no remittance requirement
• After four years: worldwide income and gains fully taxable in the UK
• Inheritance tax: the domicile-based IHT regime has also been replaced; from April 2025, IHT on foreign assets applies to UK residents after 10 years of UK residency

Transitional Rules for Former Non-Doms

Existing non-doms who were using the remittance basis before April 2025 have access to transitional arrangements. A Temporary Repatriation Facility (TRF) allows former non-doms to remit pre-April 2025 foreign income and gains at a reduced tax rate (12% in 2025-26 and 2026-27) rather than the full rate that would otherwise apply. This provides an incentive to 'clean up' offshore funds by bringing them to the UK at a known, reduced cost.

• Temporary Repatriation Facility: reduced 12% rate on remittances of pre-April 2025 foreign income/gains in 2025-26 and 2026-27
• Nomination: specific funds must be nominated for TRF treatment; elections must be made by the filing deadline
• Offshore trust protections: the former protected trust rules have been substantially unwound; offshore trust income and gains are now more broadly taxable
• Capital gains rebasing: former non-doms can rebase foreign assets to April 2017 values for CGT purposes

What Your Options Are Now

For individuals currently in the UK who were relying on non-dom status for ongoing tax efficiency, several paths exist. If you have more than four years left in the UK and significant foreign income, a structured departure may be more efficient than paying full UK rates. This requires careful analysis of the UK's Statutory Residence Test exit conditions and, often, two full tax years outside the UK before UK residency is fully broken.

For those early in their UK residency who qualify for the FIG regime, the four-year window remains genuinely useful and should be used strategically, particularly for realising foreign gains and structuring foreign income during the exempt period.

Our UK tax residency service covers entry planning for those coming to the UK, exit planning for those departing, and transitional analysis for those managing the switch from the old non-dom regime to the new framework.