Digital Nomad
Residence-Based Taxation for Non-UK Domiciled Individuals: What Digital Nomads Must Know
From 6 April 2025 the UK replaced the non-dom regime with a residence-based system, transforming how foreign income, capital gains, and estate taxes work for newcomers and long-resident individuals alike.
By NomadicTax Research Team • 5-8 min read • March 29, 2026
## What’s changed: Non-UK Domicile & Residence Rules
- The **remittance basis** of taxation has ended for all individuals from **6 April 2025**. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai))
- A new **Foreign Income and Gains (FIG) regime** means that if you are a *new arrival* who has not been UK tax-resident in the past 10 years, your foreign income and gains are **tax-free** while resident during your **first four tax years**, even if you bring them into the UK. ([gov.uk](https://www.gov.uk/government/publications/spring-budget-2024-non-uk-domiciled-individuals-policy-summary/spring-budget-2024-non-uk-domiciled-individuals-policy-summary?utm_source=openai))
- After four years of residence, you’ll be taxed on FIG arising while resident, like any UK resident. Existing non-doms got transitional tax treatment. ([gov.uk](https://www.gov.uk/government/publications/spring-budget-2024-non-uk-domiciled-individuals-policy-summary/spring-budget-2024-non-uk-domiciled-individuals-policy-summary?utm_source=openai))
## Overseas Workday Relief (OWR)
- OWR enables eligible employees to claim relief on income for duties **performed overseas** during the first **three years** of UK tax residence, **without restrictions on remittance** under new regime. ([gov.uk](https://www.gov.uk/government/publications/spring-budget-2024-non-uk-domiciled-individuals-policy-summary/spring-budget-2024-non-uk-domiciled-individuals-policy-summary?utm_source=openai))
- This helps digital nomads who travel for work but reside in the UK – limiting exposure to UK tax for some remote work abroad. Check eligibility carefully.
## Inheritance Tax (IHT) & Trusts
- The domicile-based IHT system is replaced by a **residence-based regime** from 6 April 2025. Non-UK assets may be in scope if you have been resident in UK for **10 years** prior to a chargeable event, or **10 years after departure**. ([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 with non-UK settlors are impacted: excluded property and settlor-interested protections ending. But trust assets settled pre-6 April 2025 may still be protected under transitional rules. ([gov.uk](https://www.gov.uk/government/publications/2024-non-uk-domiciled-individuals-policy-summary/changes-to-the-taxation-of-non-uk-domiciled-individuals?utm_source=openai))
## Actionable Guide for Digital Nomads & New Arrivals
1. **Assess your residency date**: when you became UK tax resident (or will become). The 10-year non-residence window matters.
2. **Plan the first four years**: foreign income & gains are tax-free while non-resident for 10 years, then first 4 years of residence.
3. **Keep track of OWR eligibility**: if you travel for work and meet criteria, claim relief.
4. **Review capital assets & trusts**: consider whether rebasing to 5 April 2019 helps; ensure trusts are structured with awareness of upcoming IHT/residence rules. $
## Example Scenarios
- **New digital nomad arriving in UK on 1/10/2025**, having been tax-resident abroad for 10 years: for tax years 2025-26, 2026-27, 2027-28, 2028-29, foreign dividends & capital gains arising are fully tax-free even if remitted.
- **Returning precedent non-dom**: someone who claimed remittance basis pre-2025 loses that basis and must assess their place under new FIG regime. Capital gains on assets held at rebasing date (5 April 2019) may only be taxed on gains since that date. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/65e7920c08eef600155a5617/Published_Costing_Document_Spring_Budget_2024_Final.pdf?utm_source=openai))
- **Local UK-resident employee doing overseas work**: check if OWR applies; during first 3 resident years, portion of overseas duties income relieved.
## Tips to Navigate Smoothly
- **Documentation**: proof of non-residence for the 10 years, travel/ work abroad for OWR, dates of domicile/ residence transitions.
- **Tax software / agent consultation**: the nuances around new FIG regime, trust rules, IHT, and rebasing are complex.
- **Keep residency & presence records**: days in UK, abroad, work duties split to claim OWR or relief correctly.
- **Plan trusts early**: consider winding up or restructuring trusts if inheritance risks increase.
UK non-dom reforms reshape tax for global individuals. For nomads and arrivals, one of the biggest takeaways: understand your tax residence, income sources, and plan before thresholds bite.