Digital Nomad
Navigating the New Residence-Based Tax Regime for Non-UK Domiciled Individuals
From 6 April 2025 the UK removed the remittance basis and domicile status, shifting to a residence-based tax system for income, capital gains and inheritance tax—affecting global income, trusts, and estates.
By NomadicTax Research Team • 5-8 min read • May 11, 2026
## What’s Changed?
Starting **6 April 2025**, the UK’s tax regime for non-UK domiciliaries underwent a fundamental overhaul: the concept of *domicile* for tax purposes was replaced with a system based on **tax residence**. The remittance basis was abolished. This affects income, capital gains, overseas trusts, and inheritance tax (IHT) for those who were previously benefiting from special non-dom rules. ([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))
## Major Components
- **Foreign Income & Gains (FIG) Regime**: For new UK residents who haven't been UK tax resident in the past 10 years, there is *100% relief* on foreign income and gains for their first 4 years of UK residence. ([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=io.&utm_source=openai))
- **Overseas Workday Relief (OWR)**: Still retained, but under the new residence-based system. Qualifying employees can claim relief from UK tax for work performed overseas under specific rules. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai))
- **Trusts and Offshore Anti-Avoidance**: Trust protections are modified. Settlements and assets under trust created after 6 April 2025 are subject to new rules and taxation based on residence. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai))
- **Inheritance Tax Moves to Residence Test**: New IHT rules now focus on **whether a person has been UK resident for 10 years prior to the chargeable event**, plus a 10-year “tail” after leaving. Excluded Property Trusts lose protection for new settlement activity post-reform. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai))
## Actions Digital Nomads & Global Movers Should Take
- Review your **timeline of UK residence** before coming, or after arrival; if you qualify as a ‘new resident,’ you may benefit from FIG relief.
- Assess jurisdiction and timing when setting up **trusts or offshore structures**—structure before or after 6 April 2025 has different outcomes. ([gov.uk](https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem4605?utm_source=openai))
- Update estate and wealth planning documents including **wills and IHT arrangements** given changes to how IHT is charged under new residency-based rules. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai))
## Example
> *Liam arrives in the UK on 6 May 2025. He hasn’t been UK resident for any of the prior 10 years. During his first four years, foreign dividends and capital gains not arising in the UK are exempt under FIG—provided he meets the qualifying new resident criteria. His previous offshore trust assets after 6 April 2025 will no longer enjoy residence-based exclusions.*
## Pros & Pitfalls
**Pros**:
- Greater clarity and neutrality compared to old ‘domicile’ tests.
- Predictability for global workers and relocators.
- Removal of complex remittance-based claims and reporting.
**Pitfalls**:
- Loss of legacy benefits for those who were relying on old domicile rules.
- Possible surprise IHT exposure for non-UK assets if residence criteria met.
**Category**: Digital Nomad