Digital Nomad
Non-Doms in Transition: What the Residence-Based Regime Means for Foreign Income & IHT
The abolition of the remittance basis and new residence-based rules for overseas income and inheritance tax now in force require non-UK domiciled individuals to re-assess both tax exposure and planning horizons.
By NomadicTax Research Team • 5 min read • November 21, 2025
## Key Elements of the Reform
The UK has introduced sweeping changes to the status and taxation of **non-UK domiciled (“non-dom”) individuals**, including:
- Replacement of the **remittance basis** with a **residence-based regime** for foreign income and gains (FIG), effective from **6 April 2025**. Under this, new arrivals (who have not been UK resident in any of the past 10 years) receive **100% relief on FIG** for their first **four years** of 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=vpkn75tqhopmkpsxtq&ref=app&utm_source=openai))
- Preferential IHT (Inheritance Tax) regimes based on domicile are being replaced with a test based on **10 years of UK residence**, both for scope and tail provisions. Excluded property trusts are being phased out. ([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))
- A **Temporary Repatriation Facility** is available for pre-April 2025 FIG and gains, allowing remittance at a reduced tax rate for a limited period. ([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))
## Implications and Opportunities
These changes affect a wide range of individuals:
- Assets or income held overseas that were previously untaxed under remittance basis may now be taxable. You need to track timing and source of income relative to 6 April 2025.
- Planning around **excluded property trusts** becomes crucial: with trust assets no longer shielded from IHT, consider whether restructuring or transferring assets is appropriate.
- The Temporary Repatriation Facility offers a window to bring in certain overseas earnings under favourable tax conditions — but it’s time-limited and applies to pre-April 2025 accrued income/gains. Legal advice is essential here.
## Case Example
- **Maria**, who became UK resident in May 2025 but was not resident in the UK in the 10 years before that, will benefit from the 4-year FIG relief. If she has foreign income of £100,000 from her investments abroad in 2025-26, that income may be relieved completely — but any income she remits from assets that arose before 6 April will need to consider the TRF. Without planning, remittances can trigger unexpected liability.
- **John**, who holds assets in an excluded property trust established years ago, must examine whether those assets are now in scope for IHT, and whether transferring or winding up the trust is cost-effective.
## Practical Steps & Advice
- Review residency history and future plans: determine whether you qualify as a “new arrival” under the 4-year FIG regime.
- Compile detailed records of overseas income, gains, and trust property — especially those arising before 6 April 2025.
- Consult with tax specialists on whether to use TRF or restructure trusts now before exclusions are removed or rules tightened.
- Monitor forthcoming guidance and consultation documents on trust reforms and IHT tail-provisions.
**Conclusion**: The move to a residence-based system represents one of the most significant shifts for non-doms in decades. If you're affected, early and informed planning is essential to manage your exposure and take advantage of transitional measures.