Entity Setup
Setting Up Entities Globally: UK’s Non-Dom Regime Reform & What It Means for Overseas Entrepreneurs
The UK has reformed its non-dom (non-domicile) tax regime; overseas entrepreneurs need to understand the new rules, deadlines, and how this affects entity setup.
By NomadicTax Research Team • 5-8 min read • November 15, 2025
## What Changed in the UK Non-Dom Regime
Starting **6 April 2025**, the UK replaced the old non-dom regime with a **residence-based regime**, abolishing the remittance basis. Individuals new to UK residence who have foreign income and gains can now benefit from **four years’ full relief**, subject to conditions. ([gov.uk](https://www.gov.uk/government/publications/autumn-budget-2024-overview-of-tax-legislation-and-rates-ootlar/841ddc37-58e0-4d3f-9b53-123e8903d274?utm_source=openai)) Offshore trusts are no longer shelters from UK Inheritance Tax with new transitional arrangements. ([gov.uk](https://www.gov.uk/government/news/a-budget-to-fix-the-foundations-and-deliver-change-for-scotland?utm_source=openai)) The business asset disposal rules (BADR) and carried interest are seeing rate changes — for example, BADR remains at 10% for 2024-25, but steps up to 14% and then to 18% in subsequent years. ([gov.uk](https://www.gov.uk/government/news/chancellor-chooses-a-budget-to-rebuild-britain?utm_source=openai))
## Implications for Setting Up Entities & Structuring Investments
### Entity structure decisions
- If you’re forming an entity (company or trust), consider for **UK-resident non-dom individuals** whether full personal taxation on global income/gains will apply after four years. A trust structure may still be useful, but protections around inheritance or transfers to beneficiaries are changing. ([gov.uk](https://www.gov.uk/government/news/a-budget-to-fix-the-foundations-and-deliver-change-for-scotland?utm_source=openai))
- Business Asset Disposal Relief (BADR) now has rising rates; timing of sale, structuring as capital disposal by individual vs entity matters. ([gov.uk](https://www.gov.uk/government/news/chancellor-chooses-a-budget-to-rebuild-britain?utm_source=openai))
### Timing strategies
- If you plan to move to the UK, entering residency before a major gain may allow full-relief period to apply.
- Disposals of foreign-held assets may be better done before importing into UK regime rules.
### Record keeping & tax treaty coordination
- Maintain foreign income/gains documentation clearly (dates, values, investments) to support relief eligibility.
- Understand how UK treaties with your country affect double tax relief and possible foreign tax credits.
## Example Scenario
Sarah, an entrepreneur from Canada, plans to move to the UK in March 2025 and has shares in her Canadian startup likely to be sold in 2026 with a significant capital gain. By becoming UK-resident before April 2025, she maximizes her four-year relief period, so that when she sells in 2026, depending on treaty/credit treatment she may minimize UK tax on foreign income/gains. If she waited until after that date, she'd lose the early-years full relief and face UK tax on foreign gains as they accrue.
## Actionable Advice for Entrepreneurs
- Engage UK tax advisors early when planning relocation or entity setup.
- Run projections for kinds of income (residual foreign dividends, interest, gains) to test whether reliefs compensate for possible UK tax.
- Consider forming companies in jurisdictions with favorable treaties, but be wary if entity might be “looked through” or see ownership attributed to individual.
- If using trusts, review whether they are affected by the non-dom reforms (esp. for Inheritance Tax and foreign asset disclosure).
## Conclusion
The UK’s non-dom reforms erase many of the older tax-planning tools for individuals entering residence. While challenges exist, for entrepreneurs planning ahead the ruling offers clarity. Decisions about residency, timing of income or gain, entity structure, and treaty interplay will make all the difference.