Introduction
From 6 April 2025, the UK removed the concept of domicile for tax purposes and replaced it with a residence-based regime. Individuals who were non-UK domiciled (“non-doms”) must now understand how this reform affects foreign income, gains, overseas workday relief, and previously preferential treatment under trusts. (gov.uk)
What changed – core features
- The remittance basis is abolished: foreign income and gains will be taxed as they arise, regardless of whether they are brought (“remitted”) into the UK. (gov.uk)
- A Foreign Income and Gains (FIG) regime replaces many non-dom rules. New residents may claim relief under a 4-year foreign income and gains regime, if eligible. (gov.uk)
- Overseas Workday Relief (OWR) continues, but under modified rules. Individuals working abroad but paid through UK contracts may qualify. (gov.uk)
Who is affected – profiles & examples
- Digital nomads who were relying on non-dom status may lose past reliance on remittance basis. If you live abroad but maintain UK residence, your foreign income will now be taxed as it is earned.
- Returning UK expats who maintained domicile status: now treated similarly to residents; any overseas trusts or deferred income visible will be taxed accordingly.
- Employees working abroad temporarily may still use OWR, but precise eligibility changed. For example, Jane, a UK ‘tax resident’ but not domiciled formerly, working in the EU, will need to check whether her employer contract and number of overseas workdays qualify under the new FIG + OWR rules.
Planning considerations – actionable insights
- Assess when you became UK tax resident: reloj your start date to calculate the 4-year regime benefits. If you arrived before 6 April 2025, different transitional rules might apply.
- Review overseas trust exposure and structure: trust distributions and ownership will now be scrutinised more severely under tax-as-arising.
- Track overseas workdays and contracts: document where work is performed to judge OWR eligibility.
- Consider dual tax treaties or foreign income tax credits to mitigate double taxation.
Compliance tips
- Update your Self-Assessment registers; expect more detailed reporting of foreign income and gains.
- Use software or adviser help to capture overseas income when accrued (not remitted).
- Keep thorough records of days abroad; keep employer contracts or assignments showing foreign work.
- Seek tax-advice especially if you had previously relied on remittance basis or non-dom structure.
Conclusion
UK’s non-dom abolition marks a fundamental shift. Digital nomads, international professionals, and anyone with foreign income or trusts should act now—assess eligibility for FIG and OWR, adjust planning, and ensure compliance with the new residence-based system.