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UK Non-Dom Tax Changes 2025: What You Must Know
The UK has announced major changes to its Non-Domicile (Non-Dom) tax regime, effective Sixth of April, Two Thousand and Twenty-Five. These reforms will reshape how foreign income and gains are taxed, especially for wealthy individuals who live in the UK but have roots abroad.
If you’re a current Non-Dom or planning to move to the UK, this blog will guide you through the old rules, what the new system introduces, and what steps you should take next.
What Is a Non-Dom?
A Non-Domicile, or Non-Dom, is someone who lives in the UK but considers their permanent home — or domicile — to be in another country.
Many Non-Doms have been able to use the UK’s remittance basis to reduce their UK tax bill by not paying tax on foreign income and gains, as long as they didn’t bring the money into the UK.
This has made the UK a favourable destination for global investors, entrepreneurs, and professionals. But from Two Thousand and Twenty-Five, the rules will change significantly.
The Previous Non-Dom Rules (Before April 2025)
Before the change, Non-Doms who were UK tax residents could:
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Pay UK tax on UK income and gains
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Avoid UK tax on foreign income and gains unless they brought (remitted) it to the UK
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Claim this remittance basis without charge for the first seven years of residence
After this period:
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If resident for seven out of nine tax years, they paid a thirty thousand pounds sterling charge annually
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If resident for twelve out of fourteen tax years, the charge increased to sixty thousand pounds sterling
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After fifteen out of twenty tax years, they became deemed UK domiciled and had to pay UK tax on worldwide income and gains — no remittance basis allowed
This system provided long-term planning opportunities, especially for wealthy global citizens.
New Rules from Sixth of April, Two Thousand and Twenty-Five
From 2025/26 tax year, the UK is replacing the remittance basis with a new four-year Foreign Income and Gains (FIG) regime. Here’s what the new system brings:
✅ Who Can Qualify?
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Individuals who were non-UK tax resident for the last ten tax years
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Now becoming UK tax residents from Sixth of April, Two Thousand and Twenty-Five onwards
✅ What Are the Benefits?
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No UK tax on foreign income or gains for the first four tax years
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Can freely bring that money into the UK without paying UK tax
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No remittance basis charges
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No complicated claims — it’s automatic if you qualify
❌ After Four Years
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You’ll be taxed just like any other UK resident
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Must pay UK tax on worldwide income and gains
What Happens to Existing Non-Doms?
If you’re already a UK tax resident and currently use the remittance basis, you won’t be able to from April 2025. Instead, the government is introducing transitional reliefs:
50% Foreign Income Taxation
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In 2025/26 only, you will pay UK tax on only 50% of your foreign income
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Helps ease the transition from remittance to full taxation
Temporary Repatriation Facility (TRF)
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Available in 2025/26 and 2026/27
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Bring past untaxed foreign income and gains into the UK and pay just 12% tax
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A chance to clean up offshore money at a much lower rate
Offshore Trust Changes
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From April 2025, UK-resident Non-Doms who created offshore trusts will now be taxed on the trust’s foreign income and gains as they arise
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Ends the long-standing protections for these structures
Example: Maria’s Case
Let’s say Maria, an Italian citizen, moved to London in Two Thousand and Seventeen. She’s used the remittance basis and has five hundred thousand pounds sterling in offshore investments.
From April 2025:
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She loses the right to use the remittance basis
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In 2025/26, she only pays UK tax on half her foreign income
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She can bring in part of her offshore funds using the TRF and pay just twelve percent tax — instead of 45%
It’s a major shift, but with proper planning, Maria can limit her tax bill.
What Should You Do Now?
If you’re affected by these changes, here are some smart steps to take:
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Review your residency history — are you eligible for the new four-year regime?
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Check your domicile status — especially if you’ve been in the UK long-term
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Consider using the TRF — to bring in money at a lower tax rate
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Plan for full global taxation — if you’ve been here more than four years
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Assess offshore trusts and structures
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Seek professional advice — early action could save you thousands
Conclusion
The Non-Dom tax changes UK 2025 mark a historic shift in the British tax landscape. The new rules aim to simplify the system but also limit long-term tax advantages for international residents.
Whether you’re a newcomer planning to relocate or a long-standing Non-Dom, these changes demand action. With proper planning, you can navigate this new system confidently and efficiently.
If you would like further assistance with this or anything else, please get in touch, contact us for expert assistance.
