Tax Planning

Mastering the Non-dom Reforms: What Future UK Residents Must Know

The UK’s 2025 reforms abolishing non-dom status introduce a 4-year foreign income & gains regime and a residence-based Inheritance Tax system—critical shifts for globally mobile individuals.

By NomadicTax Research Team • 5-8 min read • March 25, 2026

## Context & Key Changes From **6 April 2025**, the UK abolished the traditional non-domicile regime. The concept of “domicile” is replaced by a **residence-based regime**. Rather than being based on where you regard as your permanent home, tax obligations will now hinge on how long you've been a UK tax resident. ([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)) A central feature is the **4-year Foreign Income & Gains (FIG) regime**: new UK residents who had spent the prior 10 tax years entirely outside UK residence can enjoy relief from UK tax on **foreign income & gains** for their first four UK resident years. ([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)) The remittance basis is abolished. This means foreign income or gains must be declared as they arise—not only when brought into the UK—for most individuals without eligibility for the FIG relief. ([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)) ## Inheritance Tax Moves: Domicile to Long-Term Residence Inheritance Tax (IHT) changes also shift away from domicile. From **6 April 2025**, IHT on **worldwide assets** depends on whether you're a **long-term UK resident**, generally defined as residing in the UK for **10 out of the preceding 20 tax years**. An exit “tail” provision may apply for a number of years after leaving the UK; and certain transitional rules affect those with existing non-UK trusts and excluded property. ([gov.uk](https://www.gov.uk/government/publications/hm-revenue-and-customs-trusts-and-estates-newsletters/hmrc-trusts-and-estates-newsletter-april-2025?utm_source=openai)) ## Actionable Tips for Individuals & Globally Mobile Professionals - **Check eligibility for FIG relief** if you became UK resident on or after 6 April 2025. If you satisfy the prior 10-year non-UK residence requirement, you may get the 4-year FIG treatment. - **Rebase your capital assets**: existing assets can be reset to their value as of **5 April 2019**, which may reduce future capital gains exposure. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/66b33a42a3c2a28abb50de0b/E03057752_HMT_Spring_Budget_Mar_24_TEXT_PRINT.pdf?utm_source=openai)) - **Consider the Temporary Repatriation Facility (TRF)**: for income & gains accrued pre-6 April 2025, TRF allows bringing them into UK along with partial tax concessions. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/66b33a42a3c2a28abb50de0b/E03057752_HMT_Spring_Budget_Mar_24_TEXT_PRINT.pdf?utm_source=openai)) - **Non-UK trusts and settlors** must review status: distributions, settlors or beneficiaries involved in offshore trusts may now face arising-basis taxation. ([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)) ## Examples - *New UK resident Alan*, previously non-UK resident for 15 years, enters UK on 6 April 2025: he qualifies for FIG; his foreign dividends in years 1-4 won’t be taxed in UK even if remitted. - *Becky*, contributor to a non-UK trust, receives distributions in 2025-26: if her father settlor is UK resident and trusts lack sufficient protections, Becky and/or her father may be taxed under the trust reform rules. - *Charlie*, a long-term UK resident (10/20 years): owning non-UK property, his assets now fall within IHT scope if death occurs after 6 April 2025. ## Implications for Tax Planning - **Relocation & timing matter**: earlier people become UK resident, the earlier FIG relief applies. Delaying arrival might lose eligibility. - **Trust structures will need review**: trustees, settlors, beneficiaries must understand whether protections still apply. Update trust deeds and arrangements. - **IHT exposure increases** for those with offshore assets: consider wills, asset location, and scope of residence exposure. Transitions into long-term UK residence are critical. ## Bottom Line These reforms represent a paradigm shift. For globally mobile individuals, wealth planners, expatriates, and trustees, the UK’s new residence-based system replaces legacy non-dom rules—and with them, both opportunities (e.g. FIG regime) and obligations (arising-basis taxation). Assess your current and future UK residence status, review offshore structures, and plan in light of the April 2025 timeline. If in doubt, seek specialist advice early to optimise before legacy protections vanish.