What Changed on 6 April 2025
- The UK abolished the concept of domicile as a connecting factor for most UK tax purposes. (assets.publishing.service.gov.uk)
- Individuals now taxed under a Foreign Income and Gains (FIG) regime based on residence. If you become UK resident, foreign income and gains may be taxed in the UK (though transitional reliefs apply for earlier foreign income/gains). (assets.publishing.service.gov.uk)
What Digital Nomads Should Know
- Residence matters more now than ever. The new rules focus on how many days you spend in the UK and your ties. The Statutory Residence Test determines tax residency.
- You’ll need to declare foreign income and gains whether or not you bring them into the UK under the FIG rules. Remittance basis is largely phased out for most.
- Transitional reliefs exist for certain income/gains arising before 6 April 2025, including a Temporary Repatriation Facility. But after that date, expect full taxation on foreign sources. (assets.publishing.service.gov.uk)
Scenario: Nomad Between UK & Abroad
Alex lives abroad 7 months a year, works remotely for non-UK clients, visits UK occasionally. Under FIG, once settling in UK for the tax year, foreign source income is taxable regardless of remittance. To optimise:
- Track total UK vs non-UK days carefully for statutory residence projections.
- Review where contracts are seated, where company is incorporated, and whether foreign tax credits apply.
- Use double tax treaties to reduce burden where foreign income already taxed.
Actionable Tips
- Keep detailed travel and location logs. The Statutory Residence Test criteria carry weight in audits.
- If relocating temporarily to UK, consider delaying large foreign income until the next tax year if that keeps you outside residence thresholds.
- Review taxed foreign pension, investment and property income streams under FIG; talk to an adviser about potential treaty relief.
- Use Professional advice to understand whether you may qualify for any transitional reliefs such as the Temporary Repatriation Facility.
Compliance Focus
- Updated Self Assessment returns will require full disclosure of foreign income and gains where relevant.
- Since domicile no longer gives special status, reliance on the remittance basis will be limited for many.
- Ensure supporting documentation, treaties, foreign tax paid etc. is preserved.
Summary: For digital nomads and globally mobile individuals, the shift to residence-based tax rules and ending of the domicile regime has major implications. Planning, timing, and documentation are now central – ideally adjusted before residency changes or large foreign incomes crystallise.