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Non-domicile taxation of individuals – what’s changing?

The subject of non-domicile taxation has been quite the political talking point in recent years. Akshata Murty, Rishi Sunak’s wife, hit the news in 2022 when she used the current legislation to potentially save millions in UK tax on her overseas earnings.

So, I wasn’t surprised to hear that the Government plans to reform the rules, surrounding the remittance basis, which have been in place for many years.

What are the current rules?
A UK resident, but non-UK domiciled individual, might be entitled, or may choose, to be taxed under the remittance basis rules, which can come with a charge of up to £60,000 per year (it’s free for the first seven years of UK residence). The benefit? Remittance basis means a person’s overseas income and gains aren’t assessed to UK tax. That is, unless they remit those funds to the UK.

For those who currently live in the UK, but who are domiciled elsewhere, and intend to keep a large amount of funds and assets overseas, this is a pretty attractive method of being assessed in the UK.

In order to try and generate extra tax revenue, which the Government expects could be up to £3.6 billion per year from April 2026, these rules are getting quite a shakeup.

What are the new rules?
April 2025 will see the current rules scrapped, and the introduction of the four-year ‘Foreign Income and Gains’ (or FIG) regime, based on the taxpayer’s residence position. UK residents in their first four years of UK residency (after a ten-year period of non-UK residency) will be eligible for the FIG regime, and won’t suffer UK tax on overseas income or gains, regardless of whether they’re brought to the UK. They will, however, lose their personal allowance and capital gains annual exemption for any years they claim to use the FIG regime.

Those using the FIG regime will still be able to opt for Overseas Workday Relief (OWR). The new OWR will provide relief on earnings for employment performed outside the UK, and will be available for the first three UK resident tax years, but it won’t be available for those re-entering from 2025/26 if they’re not eligible for the FIG regime. OWR only provides relief against income tax, NIC will continue to be unaffected.

After their FIG regime period, individuals will be taxed in the UK on worldwide income and gains, so they’ll be in the same position as other UK residents.

The new rules don’t stop there! A Temporary Repatriation Facility will be introduced to allow previous remittance basis taxpayers to remit overseas income and gains from 6 April 2025 to 5 April 2027 at a flat tax rate of 12%. Any remittances after 5 April 2027 will be taxed as they are currently for remittance basis claimants.

Existing remittance basis users will also be able to rebase the values of their overseas assets to their value as at 5 April 2019 for capital gains tax purposes, once they’re no longer eligible for the four-year FIG regime.

Remittance basis users, who won’t qualify for the FIG regime in April 2025, will see only 50% of their overseas income charged to UK tax for the 2025/26 tax year. The r eduction will apply for one year only and only for overseas income not gains.

It also looks like there’s going to be plans for changes to Inheritance Tax, moving it away from a domicile-based system, and into a residence-based system, but this is currently awaiting consultation.

Who’s better or worse off?
         People who are going to be better off under the FIG regime include:

  • People coming to the UK and only staying for a maximum of four years where the FIG regime is available to them.
  • Those who currently have a lot of unremitted foreign income and gains who want to remit them to the UK.
  • Individuals with a UK domicile of origin (previously excluded from remittance basis) who’ve been away from the UK for 10 years, but intend to return.
  • Arrivers in the UK who intend to make the move permanent (who would then be classed as UK domiciled).

    On the other hand, the following will likely be worse off:

  • Those previously claiming the remittance basis but who won’t be eligible for the FIG regime.
  • Non-domiciled individuals who may now face Inheritance Tax in the UK on worldwide assets.

Need help?
As you can see, these rules can be rather complex. We can advise you how these changes affect you, and help you meet your reporting requirements, and potentially help reduce your tax bill. To find out more, please get in touch with your usual Larking Gowen contact, details are found on the Our People section of the website. Alternatively, you can call us on 0330 024 0888 or email

Emma Walker


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Larking Gowen


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