From 6 April 2025, the UK is introducing major changes for non-domiciled residents. The old remittance basis, which allowed non-doms to pay UK tax only on UK income and any foreign income brought into the UK, will be replaced by a new Foreign Income and Gains (FIG) regime.

The FIG regime focuses on residence rather than domicile. For individuals who become UK tax residents after spending 10 consecutive years outside the UK, the first four years of UK residency will give 100% relief on foreign income and gains. During this time, only UK-source income and gains are taxed, while worldwide income remains untaxed. After the four-year period, worldwide income and gains are taxed on the normal arising basis.

To support the transition, the government has introduced a Temporary Repatriation Facility (TRF). This allows individuals to remit foreign income and gains accrued before 6 April 2025 at reduced tax rates: 12% for 2025/26 and 2026/27, and 15% in 2027/28. Taxpayers need to clearly identify and designate these funds in their Self-Assessment filings.

Inheritance tax is also being updated. From April 2025, IHT will be based on UK tax residence rather than domicile. Individuals who have been UK tax residents for 10 of the past 20 years may be liable for IHT on worldwide assets. A new “tax tail” provision means that IHT can continue to apply for 3–10 years after leaving the UK, depending on prior residency.

These reforms are significant because they impact income, capital gains, and inheritance planning. Non-doms will need to understand how the new FIG regime interacts with existing overseas income, remittance rules, and inheritance tax obligations.