For IHT purposes, the concept of domicile will be replaced with a residence-based test from 6 April 2025. If an individual is considered a ‘long-term resident’ they will be subject to IHT on their worldwide assets.

An individual will be considered a long-term resident if they have been UK resident in 10 of the 20 tax years immediately preceding the tax year in which the relevant event occurs.

The TRF will allow individuals to designate untaxed foreign income and gains and be taxed at a 12% rate (2025/26 and 2026/27) or 15% (2027/28). They can then remit those funds in the year of designation or a later year.

Individuals who are not deemed domiciled on 5 April 2025 are able to rebase their assets to their value as of 5 April 2017.

The Trust protections for deemed settlors introduced in 2017 will be abolished from 6 April 2025, with income and gains arising in those structures potentially assessed directly on the taxpayer, if they choose to remain UK-resident.

Rehana Earle talks to Jay Bailey and Kugan Panchalingam about the changes announced in the budget.

Many employees who have come to the UK for work will be substantially affected by the abolition of the non-dom regime, with their employment income as well as their personal income and gains affected.

There are going to be some winners and some losers, but there’s certainly a lot to think about.

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.

It will be more important than ever to ensure that all US trusts with a UK connection, are reviewed on a case-by-case basis to identify whether any UK tax concerns are present.