Entity Setup
Entity Setup & Tax Planning: Using the Reformed Non-dom Regime and Property Reliefs
With the abolition of the remittance basis and changes to inheritance tax reliefs, setting up the right entity and structuring property or farm assets becomes crucial for minimizing tax exposure.
By NomadicTax Research Team • 5-8 min read • November 22, 2025
## Key Reforms to Understand
### Abolition of the Remittance Basis & New Residence-Based Regime
From **6 April 2025**, non-UK domiciled individuals are subject to a residence-based tax regime rather than the old remittance basis. This means foreign income and gains are taxable unless certain reliefs apply, typically for the first **four years** of residence. ([gov.uk](https://www.gov.uk/government/publications/autumn-budget-2024-overview-of-tax-legislation-and-rates-ootlar/841ddc37-58e0-4d3f-9b53-123e8903d274?utm_source=openai))
### Inheritance Tax Changes for Agricultural & Business Property Relief
As part of the Autumn Budget 2024, draft legislation was published that reforms how Agricultural Property Relief (APR) and Business Property Relief (BPR) work from **6 April 2026**. Relief will still be **100%** for the first £1 million of combined business or agricultural property but only **50%** on any excess. ([hansard.parliament.uk](https://hansard.parliament.uk/html/Commons/2025-07-21/WrittenStatements?utm_source=openai))
### Capital Gains Tax Revisions
Main rates of **Capital Gains Tax** are increasing from 10% to 18%, 20% to 24% depending on reliefs and income, from **30 October 2024** in many cases, with further phased increases for Business Asset Disposal Relief and Investors’ Relief. ([gov.uk](https://www.gov.uk/government/publications/autumn-budget-2024/autumn-budget-2024-html?utm_source=openai))
## Setting Up Entities Strategically
- **Use a UK-resident company** when holding real estate or agricultural assets. The new reliefs under IHT may favour entities because relief caps and tapering work differently than for individuals.
- **For non-dom individuals**, consider timing of becoming UK resident, bringing in foreign income/gains early, or investing in UK assets that benefit from reliefs. But beware of the tax cost of distributions or transfers under the new regime.
- **Trusts and corporate structures** need review—transfers of farms or business assets into trusts may incur IHT or CGT; reliefs may be limited under newer rules.
## Examples & Illustrations
1. **Family Farm Case**: A family owns a farm worth £1.5 million. Under new IHT reliefs from 2026, first £1 million gets 100% APR/BPR, but the remaining £500,000 only 50%. If instead the farm is owned via a company or a trust, outcomes may vary depending on how relief is claimed and the trust’s UK status.
2. **Non-dom Investor**: If you become UK resident in 2025 and have foreign shares with gains, under the old remittance basis you might avoid UK taxation on overseas gains until remitted. Now, those gains may be taxable unless you're within the first four years and meet relief thresholds. Foreign corporations or platforms might offer sheltering but need to align with disclosure rules.
## Actionable Planning Steps
- **Review current ownership structures**: Are properties or farms held personally, via companies, via trusts? If transfers are needed, do them ahead of relief reductions.
- **Consider UK company versus personal ownership** especially if IHT relief tapers off. When companies distribute or liquidate, consider corporation tax, dividend tax, CGT.
- **Set up advance planning for non-doms**: If you expect to spend time in UK or become resident, plan how to use the four-year relief window.
- **Draw caps and thresholds carefully**: Don’t assume full relief — the £1m full relief limit per individual for property relief is real and excess is immediately cut in half.
## Key Takeaways
- The tax landscape for foreign income, agriculture/business property, and capital gains has shifted significantly—structure matters more than ever.
- For non-doms especially, residency status, relief windows, and entity form affect both tax rates and exposure.
- Early and proactive advice is essential when dealing with complex assets or cross-border income. Strategic entity setup and timing can deliver substantial savings under the new rules.