What’s Changed Under the New Regime
- The UK abolished the remittance basis from 6 April 2025. Non-UK-domiciled individuals who are UK residents will be taxed on foreign income and gains (FIG) as they arise, unless eligible for transitional/relief regimes. (gov.uk)
- A new 4-year FIG regime applies for those who qualify (e.g. new UK residents after at least 10 years of non-residence). For those first four years in UK tax residence, their foreign income and gains can be received (brought into the UK) without extra tax under this regime. (gov.uk)
- Transitional measures include rebasing assets to 5 April 2019, a Temporary Repatriation Facility to pay 12% on certain pre-April 2025 income/gains, and a 50% reduction in foreign income taxed in first year for existing non-doms losing the remittance basis. (gov.uk)
Implications for Digital Nomads & Expats
- Foreign-sourced work: If you are earning overseas while residing in the UK, you’ll need to carefully track when FIG is generated and whether you fall under the new 4-year regime. You may avoid UK tax for a period but must comply after that.
- Trusts and offshore structures: Settlor-interested trusts and offshore entities previously used for tax deferral or avoidance are now more exposed. From 6 April 2025, figures in such trusts may be taxed as they arise. (gov.uk)
- Residence test becomes more important: Your length of UK residence and past non-residence matter greatly. Long absences before arriving help qualify for relief, but after staying more than four years, foreign income/gains are taxed like UK domiciled individuals. (assets.publishing.service.gov.uk)
Practical Planning Tips
- Maintain clean records of foreign income and gains, including when they arise, not just remittance dates.
- Plan asset dispositions—if you have capital gains from pre-April 2025 assets, rebasing may reduce tax liability.
- Consider timing travel and residence to control when tax residence begins. For example, delaying becoming UK resident or ensuring 10 years of non-residence before moving in might allow benefit of the 4-year relief.
- Where trust interests or settlor interests are involved, get professional advice about matching rules, onward-gift rules, and how pre-existing Figures are treated.
Example Scenario
Maria, a freelance software developer, has lived outside the UK for 12 years and plans to move to London in June 2025. Under the new rules, she qualifies for the 4-year FIG regime, so from April 2025 to April 2029 she can bring foreign income/gains into the UK without further tax, provided she qualifies. But after four years, any new income/gains outside the UK will be taxed as they arise—same as UK residents.
Key takeaway: digital nomads should evaluate where their foreign income arises, plan residency carefully, and use transitional reliefs if available.