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The abolition of the non-dom tax regime – Global Mobility

Many employees who have come to the UK for work will be substantially affected by the abolition of the non-dom regime

15 January 2025 | Authors: Rehana Earle, Jay Bailey

Many employees who have come to the UK for work will be substantially affected by the abolition of the non-dom regime.

In the Autumn Budget 2024, UK Chancellor Rachel Reeves confirmed that the UK non-dom regime will be abolished from 6 April 2025 and with it the remittance basis of taxation.

From 6 April 2025, where individuals have been non-UK resident for the previous 10 years, they will be eligible for the new Foreign Income and Gains (FIG) regime for the first four consecutive years of UK residence.

The remittance basis allowed some tax concessions prior to its abolition, replaced by the FIG with transitional rules spanning three years. The transitional rules are in place for those who have already been in the UK and will enable them to remit monies to the UK with lower tax implications than they would have under the remittance basis regime.

The FIG regime has largely introduced complexities and reduced benefits for those affected including the removal of settled trust protection as well as exposing long-term residents, i.e. individuals who have been in the UK for at least 10 years, to Inheritance Tax (IHT).

A positive change can be seen in the new Overseas Workday Relief (OWR) rules. This offers administrative relaxations for individuals and employers. However, the introduction of a cap on the relief for new

UK residents from 6 April 2025 of 30% or £300k could be a significant reduction for highly paid employees or executives.

Employers should actively manage their global talent. They should also carefully consider the tax support they offer to their employees and whether there any planning opportunities or ways to minimise any surprises or hidden costs for the employee and employers (e.g. under a tax equalisation arrangement).

Would you like to know more

If you would like to discuss the impact of these changes, please get in touch with your usual Blick Rothenberg contact, or one of the team using the form below.

You can find out more about the non-dom changes on our dedicated page.

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