Understanding the new regime
From 6 April 2025, the UK abolished the remittance basis and the concept of domicile as a connecting factor in its tax system. Instead, UK residency now triggers tax on worldwide income and gains under the Foreign Income and Gains (FIG) regime. Transitional reliefs include a temporary 50% exemption on foreign income in 2025-26 and a Two-Year Temporary Repatriation Facility at 12% for previously accrued foreign income and gains. (gov.uk)
Implications for digital nomads
- Residency matters more than ever: If you are in the UK long enough to be a UK tax resident under the Statutory Residence Test, you’ll now be taxed on all your foreign income and gains, even if you don’t bring them into the UK.
- Overseas Workday Relief (OWR): Previously available to UK residents with non-dom status, OWR eligibility now depends on residence, not domicile. Only those under the FIG regime may claim it. (gov.uk)
Examples & scenarios
| Situation | Old non-dom rules | New FIG regime effect |
|---|---|---|
| You live outside UK but visit often and work remotely for a non-UK employer | Might have used remittance basis to exclude foreign income not brought into UK | If resident, still taxed on worldwide income, regardless of remittance |
| You have assets abroad with gains | Gains taxed only if remitted (under remittance basis) | Gains taxed whether or not brought into UK |
| Long-term planning for moving abroad | Many non-doms could retain favorable status | Now status depends on residence, not just domicile, reducing certainty needed |
Actionable insights and tips
- Check your status: Use the Statutory Residence Test to determine whether you’re UK resident each tax year. Residency brings full tax liability under FIG, no escape via remittance.
- Plan foreign income timing: If you expect foreign income or capital gains, consider whether they arise before or after you become UK resident.
- Use transitional reliefs: If earned income or gains before April 2025, explore repatriation options and rebates available.
- Account for OWR carefully: New eligibility rules under FIG mean work done overseas may or may not qualify for relief; contracts from 6 April 2025 are especially relevant.
Key takeaways
- Non-dom status no longer shields from UK tax on foreign income once resident.
- For digital nomads, better planning and awareness of residency triggers and timing of income/gains is essential.
- Employers and advisers should adjust contracts, reporting, and advice to align with the new rules.
This seismic shift means that remote work, foreign investments, and travel patterns must be reviewed with tax in mind. Digital nomads should engage proactively with tax advisors, maintain clear records of time spent in the UK and abroad, and map income streams to jurisdictional rules to minimise surprises (and penalties).