Navigating personal and business tax complexities for non-domiciled individuals
Non-Domiciled Individuals
The abolition of the non-dom tax regime
In the Spring Budget 2024 Jeremy Hunt announced the abolition of the non-dom tax regime and a new modernised ‘tax holiday’ for individuals moving to the UK.
It is one of the most significant reforms to the non-dom tax regime in our generation. Many affected individuals will now face a dilemma due to the proposed rules, in terms of both their existing structures and ongoing exposure to UK Tax.
In this video series and associated articles we highlight what this could mean for you and how you can prepare for the changes.
Inheritance Tax (IHT)
With domicile no longer playing a part in the IHT regime, the new rules dictate that an individual’s worldwide estate is subject to UK IHT once they’ve been UK resident for 10 years, previously 15.
Transitional provisions
The three main transitional concessions the Chancellor proposed in the Spring Budget for certain individuals are:
- Only 50% of foreign income will be subject to UK tax in 2025/26
- Individuals who have previously claimed the remittance basis at some point will be able to make a remittance of previously untaxed income and gains in either the 2025/26 or 2026/27 tax year at a flat rate of 12%
- Individuals will be able to rebase their non-UK assets to the market value as at April 2019
Trust Protection
UK resident non-domiciled individuals can currently benefit from a tax-free roll up of non-UK income and gains where assets are held in a trust structure. From 6 April 2025 the existing trust protection will cease.
Foreign Income and Gains Regime
When coming to the UK for assignments or short-term work, both employers and employees will be impacted by the abolition of the non-domiciled regime and the introduction of the new Foreign Income and Gains (FIG) Regime.
The impact for Americans in the UK
Many US citizens and US ‘green card’ holders who live and work in the UK will be impacted by the abolition of the UK’s non-dom tax regime.
How we can help
If you would like to discuss how the abolition of the non-dom regime will impact you, please get in touch with John Bull, one of the team below, or your usual Blick Rothenberg contact.
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