Digital Nomad
Navigating the New Residence-Based Regime: What Digital Nomads Need to Know
With the removal of domicile status from UK tax law as of 6 April 2025, digital nomads should understand how the new residence-based rules, the 4-year foreign income & gains (FIG) regime, and the Temporary Repatriation Facility (TRF) may affect their UK tax obligations.
By NomadicTax Research Team • 5-8 min read • May 20, 2026
## What Changed: Domicile to Residence-Based Taxation
From **6 April 2025**, the UK abolished the concept of **domicile** for tax purposes, replacing it with a **residence-based system**. The remittance basis is largely eliminated, and new rules apply to non-UK domiciled individuals (non-doms) based on how many years you're resident in the UK. ([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))
### 4-Year Foreign Income & Gains (FIG) Regime
If you have **not** been a UK tax resident in the **10 years immediately before** your first year of residence from 2025-26 onward, you may qualify for **4 years** of relief on foreign income and gains under the new FIG 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))
### Temporary Repatriation Facility (TRF)
For amounts of income and gains accrued **before 6 April 2025** while you were using the remittance basis, the **TRF** provides a way to bring them into UK tax at a **reduced rate**. It lasts for **3 tax years**, with rates around 12% in the first two years and 15% in the final year. ([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))
### Overseas Workday Relief & Inheritance Tax Changes
Overseas Workday Relief has been aligned to the FIG regime (including a financial limit: the lower of **£300,000** or **30% of total employment income**), and Inheritance Tax now follows **residence-based** criteria instead of “domicile.” Long-term UK residents (10 out of past 20 years) will have new IHT liabilities on non-UK assets. ([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))
## Implications for Digital Nomads
| Scenario | Before 6 April 2025 | After the Change |
|----------|-----------------------|--------------------|
| Nomad arrives in the UK, previously non-resident 10 years | Could use remittance basis: pay tax only on UK-sourced income & gains remitted. | May qualify for FIG: foreign income/gains exempt for 4 years if not resident in past 10 years. |
| Holds offshore trust or assets | Protected under settlor-interested structures. | Protection removed unless qualify under FIG or use TRF. |
| Leaves UK temporarily | Remittance rules applied to foreign income if brought in. | Residency clocks, FIG regime apply differently. |
## Practical Steps & Strategies
- **Determine residency status early**: Track UK days; ensure whether you're deemed a UK resident, for which years. This determines your access to FIG relief.
- **Apply for FIG relief if eligible**: If non-resident for prior 10 years, the FIG regime can significantly reduce tax on foreign income/gains in your first 4 years of UK residence.
- **Use the TRF if you have old accumulated remittance basis assets**: You may designate pre-6 April 2025 foreign income/gains for relief at reduced TRF rates.
- **Understand Overseas Workday Relief limits**: Make sure employer is aware of the lower of £300,000 or 30% rules; proper records/logs of day allocations are crucial.
- **Plan inheritance & estate issues**: If expecting to become a long-term UK resident (10 out of 20 years), you may face IHT on non-UK assets; consider structuring ahead of time.
## Example Case Study
Freya is a digital marketer who moved to the UK in June 2025. She wasn't UK resident in the prior 10 years. In 2026-27 she earns £100,000 from UK employment and £40,000 from abroad via remote consulting. Under FIG, for her first 4 tax years, the £40,000 foreign income would be **exempt** if she meets conditions (e.g. tax year income sources, qualifies as “new arrival”). If she had old foreign income under remittance basis, she could use the TRF to remit those amounts at 12–15% rather than full UK rates.
**In summary**, digital nomads relocating to the UK or dividing their time should get advice early, keep excellent records, and assess whether FIG or TRF offers relief. Knowing these rules can save tens of thousands in tax over just a few years.