New UK Non-Domicile Tax Programme 2025
Overview of the upcoming changes to the UK's non-domicile tax regime effective 2025.
The UK government has announced significant reforms to the non-domicile tax regime that will take effect from April 2025. These changes fundamentally alter the tax position of non-domiciled individuals resident in the UK.
The traditional remittance basis of taxation for non-doms will be abolished. Instead, a new 4-year residence-based regime will be introduced for individuals who become UK tax resident after spending 10 or more years outside the UK.
Under the new rules, qualifying individuals will pay no UK tax on foreign income and gains for their first 4 years of UK residence. After this period, they will be taxed on their worldwide income like any other UK resident.
The changes also affect inheritance tax planning, with foreign assets held in offshore trusts becoming subject to UK inheritance tax after the initial 4-year period in most cases.
These reforms represent a significant shift in UK tax policy and will require many current and prospective UK residents to reconsider their tax planning. Alternative jurisdictions such as Cyprus, Malta, and Portugal may become more attractive for those seeking favorable tax treatment.