The end of non-dom status

What non-dom status was

Domicile is a concept of English common law and roughly means the country you regard as your permanent home. At birth you usually took the domicile of the country your father regarded as his permanent home. A Dane who spent ten years in London therefore usually stayed domiciled in Denmark, even though he had long been UK resident for tax.

Until 5 April 2025 that brought a solid advantage: UK residents domiciled abroad paid no UK tax on foreign income as long as they did not bring it to the UK. That was the remittance basis. Long-stayers paid an annual charge for it, the remittance basis charge: £30,000 after at least 7 of the last 9 tax years, £60,000 after at least 12 of the last 14. For inheritance tax you became deemed domiciled after 15 of 20 years.

The system was complicated, expensive to advise on and politically exposed. On 29 July 2024 the government set out its plans, and the Finance Act 2025 put them into law.

What has applied since 6 April 2025

The remittance basis has been abolished since 6 April 2025, and with it domicile as a connecting factor in tax law. In its place is a system that looks only at residence under the statutory residence test. That produces three groups.

Newcomers after at least ten tax years without UK residence get the four-year FIG regime: for four years they can exempt foreign income and gains on a claim, and may even bring the money to the UK tax-free. That is more generous than the old remittance basis. Everything is in our piece on the FIG regime.

All other residents, including former non-doms after their fourth year, pay tax on worldwide income and gains as they arise, just like Brits. The government estimated that around 9,300 people would lose their previous preferential treatment this way.

Former remittance basis users also carry a legacy problem: income and gains left abroad under the remittance basis up to 5 April 2025 are still taxed under the old rules when they come to the UK. That holds even if someone returns after ten years away and uses the FIG regime for new income.

The transitional rules for former non-doms

For the old money the Finance Act 2025 built a time-limited exit, the Temporary Repatriation Facility. If you used the remittance basis in the past and are UK resident in the year of designation, you can designate old money and pay a special rate: 12% in 2025/26 and 2026/27, 15% in 2027/28. After that the money is free. Unmatched old gains in trust structures are covered too. Designation happens in the tax return; the last deadline is 31 January 2030 for 2027/28.

Capital gains tax has a second easing: former remittance basis users can use the value on 5 April 2017 as the base cost for foreign assets they held on that day. Growth before that date then stays out of the calculation.

Overseas workday relief for working days abroad was extended to four years and tied to the FIG regime, but it is now capped: at most the lower of £300,000 or 30% of total employment income. You no longer have to keep the salary in an account abroad.

Trusts and inheritance tax: where the reform cuts deepest

The protection for foreign income and gains in settlor-interested trusts has ended for non-doms outside the FIG regime. Income and gains of such trusts are in most cases taxed as they arise. What that means for existing structures is in our piece on trusts.

Inheritance tax now follows residence too: anyone UK resident in at least 10 of the last 20 tax years is a long-term resident, and then their worldwide estate falls into UK inheritance tax. After leaving you stay in the net for 3 to 10 years, depending on how long you were resident. For long-term residents from abroad this is often the most expensive part of the reform. The details, including the transitional rules for former non-doms, are in our piece on UK inheritance tax.

What Budget 2026 says

In the Budget of 28 October 2026 the government confirmed the new system and adjusted it in two places: moving to the UK with existing trusts is to become easier, and double taxation on investments through US LLCs is to end from early 2028; the legislation for that is only announced for the Finance Bill 2027-28. At the same time it said it would keep reviewing whether the residence-based system strikes the right balance between international competitiveness, fairness and the public finances. A return to the remittance basis is not on the table.

If the end of non-dom status makes you think about leaving the UK altogether, the UK side is in leaving the UK.

Sources: HMRC: Reforming the taxation of non-UK domiciled individuals (TIIN); GOV.UK: Tax on foreign income; HMRC Helpsheet HS266: Foreign income and gains (FIG) regime (2026); HMRC Helpsheet HS264: Remittance of pre-6 April 2025 foreign income and gains and the TRF; HM Treasury: Budget 2026 (28 October 2026)