What’s Changing for Non-UK Domiciled Individuals From 6 April 2025
The UK is ending the remittance basis of taxation, replacing it with a 4-year Foreign Income & Gains (FIG) regime for individuals who become UK resident after at least ten years of non-UK residence. (gov.uk) From 6 April 2025, FIG includes:
- Exemption from UK tax on foreign income and gains for the first four tax years after becoming resident, provided you meet eligibility criteria. (gov.uk)
- Taxation on UK income and gains as before. (gov.uk)
- Overseas Workday Relief (OWR) being retained but simplified, eligibility will depend on residence status and whether you opt into the FIG regime. (gov.uk)
What this Means for Digital Nomads
If you're a digital nomad preparing to move or recently moved to the UK, here's what you need to watch for:
| Scenario | Old System | New System (From 6 April 2025) |
|---|---|---|
| Move to UK after 10 years of non-residence | Could apply remittance basis indefinitely (or paid charge) | Eligible for FIG regime: first 4 years foreign income/gains exempt if criteria met. Once FIG ends, taxed on worldwide income/gains. (gov.uk) |
| Undeclared overseas trust distributions | Remittance basis and complex trust rules | Protection removed unless you qualify for FIG. Trust distributions taxed on arising basis for certain settlors/transferors resident >4 years. (gov.uk) |
Actionable Steps and Planning Tips
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Assess your eligibility: Are you UK resident after >10 years non-residence? If yes, the FIG regime may bring relief for first four years.
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Document income and gains: Maintain records of foreign income and gains before relocation—especially if via trusts. You may need to elect to rebase certain assets to their value as at 5 April 2019. (gov.uk).
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Consider timing of bringing money to the UK: Under FIG, foreign income/gains allowed in without extra charges in first 4 years, which could reduce costs related to remittances.
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Monitor changes in relief and trust rules: If you have interest in non-resident trusts, new rules may affect how distributions are taxed. Consult legal/tax advisor regarding settlements or trusts abroad.
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File Self Assessment correctly: Since April 2025, the tax year you become resident is critical. You must indicate which regime you opt into. Use guidance HMRC publishes and stay ahead of deadlines.
Example Case
John is a software consultant living abroad for 12 years. He moves to the UK in May 2025 and becomes UK tax resident. Under the new rules:
- Year 2025-26 to 2028-29: foreign income and gains are exempt, assuming criteria met (FIG regime).
- If he received trust distributions from a non-resident trust after 6 April 2025, those would be taxed on the arising basis unless he qualifies under FIG and the trust falls into the new rules. (gov.uk)
If John had remained outside FIG eligibility, he might have been subject to remittance basis taxation previously, which often involved complications and charges.
Key Takeaways
- The remittance basis is abolished from 6 April 2025 for most non-domiciled residents. FIG regime becomes core for eligible.
- First four years of foreign income/gains under FIG may be exempt if conditions met.
- Trust distributions and protection are changing significantly.
Digital nomads considering UK residence need to re-evaluate their financial and trust structures before April 2025. Proactive planning could save years of extra tax and compliance headaches.