Digital Nomad
Navigating Reforms for Non-UK Domiciled Individuals: What Digital Nomads and Expats Need to Know
From 6 April 2025, the UK removed domicile status in its tax system—replacing it with a residence-based regime. This article explains what that means in practice for non-UK domiciliaries travelling, working or investing from abroad.
By NomadicTax Research Team • 5-8 min read • November 15, 2025
## Overview of the Reform
- The UK government has **abolished the concept of domicile** for tax purposes, effective **6 April 2025**, replacing it with a **residence-based regime**. ([gov.uk](https://www.gov.uk/government/publications/tax-changes-for-non-uk-domiciled-individuals/reforming-the-taxation-of-non-uk-domiciled-individuals?utm_source=openai))
- Under the new regime, non-UK domiciled individuals no longer get preferential tax treatments simply by virtue of being deemed domiciled; instead, tax depends on actual **residency** and specific qualifying criteria. ([gov.uk](https://www.gov.uk/government/publications/2024-non-uk-domiciled-individuals-policy-summary/changes-to-the-taxation-of-non-uk-domiciled-individuals?os=vpkn75tqhopmkpsxtq&ref=app&utm_source=openai))
## Key Elements for Digital Nomads & Long-Term Expats
| Topic | What Has Changed | Why It Matters |
|---|---|---|
| Foreign Income & Gains (FIG) | New arrivals qualify for **100% relief** on foreign income and gains for their first **4 years** of UK residence, provided they haven't been UK resident in the previous 10 consecutive tax years. ([gov.uk](https://www.gov.uk/government/publications/2024-non-uk-domiciled-individuals-policy-summary/changes-to-the-taxation-of-non-uk-domiciled-individuals?os=vpkn75tqhopmkpsxtq&ref=app&utm_source=openai)) | Digital nomads or expats returning after many years get a grace period for offshore income and gains without immediate UK tax. |
| Remittance Basis & Overseas Trusts | Preferential treatment for remitted foreign income and overseas trusts ends for those who do not qualify for the FIG regime. ([gov.uk](https://www.gov.uk/government/publications/2024-non-uk-domiciled-individuals-policy-summary/changes-to-the-taxation-of-non-uk-domiciled-individuals?os=vpkn75tqhopmkpsxtq&ref=app&utm_source=openai)) | No more avoiding UK tax by keeping funds or income abroad unless under the FIG rules. |
| Inheritance Tax (IHT) | New **residence-based** rules from 6 April 2025. Non-UK assets are in scope of IHT based on a person’s residence history (e.g. ten years’ residence before event) rather than domicile. Excluded Property Trusts no longer shield assets. ([gov.uk](https://www.gov.uk/government/publications/2024-non-uk-domiciled-individuals-policy-summary/changes-to-the-taxation-of-non-uk-domiciled-individuals?os=vpkn75tqhopmkpsxtq&ref=app&utm_source=openai)) | Estate planning needs refreshing if you hold property or assets outside the UK. |
| Transitional & Rebase Provisions | Foreign gains under the old remittance basis before 6 April 2025 are still taxed when remitted. Also, individuals impacted by the change may benefit from **rebasing** foreign assets on an as-at-appointable date; details to be clarified. ([gov.uk](https://www.gov.uk/government/publications/2024-non-uk-domiciled-individuals-policy-summary/changes-to-the-taxation-of-non-uk-domiciled-individuals?os=vpkn75tqhopmkpsxtq&ref=app&utm_source=openai)) | Important when disposing of assets acquired before the reforms. |
## Actionable Strategies
- **Check eligibility** for the 4-year FIG relief. If you’ve not been UK resident in any of the past 10 years, you may benefit.
- **Keep detailed records** of foreign income, gains, and trust arrangements, especially for assets acquired before 6 April 2025.
- **Review estate plans**—especially if you have overseas property or trusts, to understand which assets now fall under IHT.
- **Consider cash flows and remittances** carefully. Under the new rules remittance itself doesn’t offer relief unless within FIG.
## Practical Example
A digital nomad who returns to the UK in May 2025 after living abroad for 12 years would qualify for FIG relief. If they earn income or gains abroad during their first four tax years, those would be taxed under special relief. But income from trusts or foreign assets prior to April 2025 and types of income/gains not covered under FIG may face taxation under standard rules when remitted. Their inheritance obligations for overseas property will depend on the 10-year residence test prior to any IHT event.
## Challenges & Considerations
- **Uncertainty during transition**, especially around the rebasing date for capital gains tax, which government has not yet finalized.
- **Complexity of overseas trusts** and remittance basis users—they must adapt quickly.
- **Tax planning costs** may increase due to need for expert advice and fresh assessments.
## Summary Takeaways
- Domicile is gone; **residence defines tax exposure**.
- FIG regime gives **temporary relief** for eligible newcomers—use it wisely.
- Overseas assets & trusts need careful review—inheritance and trust rules are transformed.
- Start planning now. Digital nomads, expats, returnees—all must revisit their financial and estate arrangements under the reforms.
By understanding the new regime in detail and acting early, those formerly relying on domicile-based advantages can still position themselves advantageously under the residence-based framework.