Entity Setup

Entity Setup & Trusts Post-Non-Dom Reforms: What Founders Need to Know

With non-dom status gone and residence-based rules in place, founders, entrepreneurs and trust users need to rethink how they structure entities—this article covers trust exposures, enterprise incentives, and what corporate structures now make sense in the UK.

By NomadicTax Research Team • 5-8 min read • April 19, 2026

## The changing landscape for trusts and entity structures⏤post non-dom reforms

With the non-dom (domicile-based) regime abolished from **6 April 2025**, many trust and entity structures now carry different tax implications. Trusts holding non-UK assets may no longer benefit from “excluded property” status unless settlors aren’t long-term UK residents. Similarly, founders setting up companies or enterprises with foreign ownership should review how foreign income is taxed under the new FIG regime.([gov.uk](https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals/technical-note-changes-to-the-taxation-of-non-uk-domiciled-individuals?utm_source=openai))

### Trusts & Inheritance Tax (IHT) exposure

Key points: • “Long-term UK resident” status for purposes of IHT is based on being resident for at least **10 of the previous 20 tax years**, with a “tail” period after leaving the UK.([gov.uk](https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals/technical-note-changes-to-the-taxation-of-non-uk-domiciled-individuals?utm_source=openai)) • Trusts created by non-UK domiciled settlors after 6 April 2025 (or additions thereafter) will fall under residence-based IHT rules, reducing the benefit of offshore structures to avoid UK IHT.([gov.uk](https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals/technical-note-changes-to-the-taxation-of-non-uk-domiciled-individuals?utm_source=openai)) • Assets held in trust must be assessed for whether they remain “excluded property” or now in scope for UK IHT or CGT. Anti-avoidance rules will be strengthened.([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai))

### Considering company and share-holding structures for founders & scale-ups

Tax incentives remain vital for startups and scaling businesses. Under Budget 2025: • **Annual Investment Allowance** stays at £1 million, allowing immediate relief on plant and machinery purchase.([gov.uk](https://www.gov.uk/government/news/budget-2025-fact-sheet-tax-support-for-businesses?utm_source=openai)) • Enterprise tax incentives have increased eligibility, supporting scale-ups to attract investment.([gov.uk](https://www.gov.uk/government/news/budget-2025-fact-sheet-tax-support-for-businesses?utm_source=openai)) • Stamp duty reliefs / exemptions apply for new UK listings—helpful if you’re raising capital.([gov.uk](https://www.gov.uk/government/news/budget-2025-fact-sheet-tax-support-for-businesses?utm_source=openai)) These incentives should inform your entity’s structure, e.g., whether to raise investment through a UK-resident entity or offshore structure, considering both tax and funding implications.

## Practical examples & strategies for entity setup

**Example 1: The tech founder with overseas investors** Sam is setting up a UK-incorporated company, but some seed funding comes from overseas. Under the old non-dom regime, investors may have structured exits or share-transfers offshore. Now, with residence-based FIG and trust reforms, UK CGT and IHT exposure increases. Sam should ensure clear contractual and share-trust arrangements, possibly using UK entities or hybrid structures where appropriate, and get clarity on tax treaties.

**Example 2: Trust for estate planning** Janet, a soon-to-be long-term UK resident, sets up a trust with non-UK assets. Any additions after 6 April 2025 could be subject to IHT unless Janet maintains non-long-term status. Structure so that trust assets and contributions likely preserve excluded property status (if still eligible) or accept liability and plan transitions.

## Setting up smartly post-reform: actionable checklist

1. **Review current trusts and asset holding entities**, especially those with foreign property or non-UK assets, for IHT and CGT implications. 2. **Consider UK company incorporation** for transparent tax treatment and easier investor appeal. 3. **Document Trust deeds and contributions** made before and after policy change. 4. **Evaluate whether to benefit from reliefs** like Annual Investment Allowance, UK Listing Relief, etc., and ensure entity qualifies. 5. **Seek professional legal/tax guidance**—trust, entity or estate planning in cross‐border situations is complex and subject to consultation and draft legislation. 6. **Keep abreast of upcoming consultations**, especially offshore anti-avoidance legislation and transfer pricing documentation.

## Risk points to avoid

* Assuming offshore trust or company means no UK tax exposure any more. * Failing to update deeds, documents, or elections- e.g. OWR election. * Neglecting the CGT rebasing opportunity for assets accrued before April 2025. * Overlooking inheritance rules for heirs or settlors based on residence status. * Using offshore structures without clear documentation—HMRC anti-avoidance could impose penalties. **Bottom line**: Entities and trusts can still be effective under the new tax regime, but only with thoughtful setup, timing and records. Founders, trustees and foreign-account holders must revisit old assumptions and plan for transparency, residency status, and UK tax exposure moving forward.