Digital Nomad
Strategic Moves for Digital Nomads Under the UK’s New Residency-Based Regime
With the UK ending its remittance basis system from April 2025 and introducing a residence-based tax regime, digital nomads face key decisions about where to live, how to fund incomes abroad, and whether to repatriate assets.
By NomadicTax Research Team • 5-8 min read • November 19, 2025
## Overview
Starting **6 April 2025**, the UK replaces its remittance basis system—traditionally allowing non-UK domiciliaries taxed on income brought into the UK—with a **residence-based regime**. Under this, non-UK individuals become subject to tax on foreign income and gains as they arise, unless they qualify under the grace‐period “**4-year foreign income and gains (FIG) regime**”. ([gov.uk](https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals/technical-note-changes-to-the-taxation-of-non-uk-domiciled-individuals?utm_source=openai))
For digital nomads, this represents a seismic shift. Whether you travel frequently, split time between countries, or generate income abroad, your tax status, tax planning strategies, and asset decisions need a fresh look. This article outlines what to watch and how to act.
## Key Changes and Impacts for Digital Nomads
- The **remittance basis** is abolished for all UK resident non-domiciled individuals from April 2025. Foreign income and gains will now be taxed as they accrue. ([gov.uk](https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals/technical-note-changes-to-the-taxation-of-non-uk-domiciled-individuals?utm_source=openai))
- A **4-year foreign income & gains (FIG) regime** for *new arrivals*, offering 100% relief for foreign income and gains during their first 4 years of UK tax residence, provided they were non-UK tax resident for the previous 10 years. ([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))
- Existing remittance basis users can designate and remit prior earnings through a **Temporary Repatriation Facility** (TRF) at reduced rates (12-15%), available for 3 tax years. ([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))
- The rules governing **Overseas Workday Relief** (OWR) are aligned to the new FIG regime. Income earned abroad that qualifies under OWR and FIG may be eligible for relief, but with tighter limits on foreign earnings and duration. ([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))
- UK Inheritance Tax (IHT) transitions from domicile-based to **residence-based** rules, especially affecting assets and trusts held overseas. Long-term residents (10 of last 20 tax years) become liable on worldwide assets, with “tail years” applying. ([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))
## Practical Tax Planning Strategies
### Planning Before Arriving or Moving
- Delay establishing UK tax residence if you wish to preserve remittance-basis benefits for another year. Use that time to structure assets or defer gains.
- Non-resident income planning: For income or gains you realize **before** acquiring UK tax residence (or before 6 April 2025), evaluate whether to keep them abroad until remitted, or take advantage of the TRF once in force.
- Trust setup: If using settlor-interested trusts, pay attention to how trust distributions and gains are treated under new rules. Assets held in trust after 6 April 2025 may lose protection.
### While Under the FIG Regime (First Four Years)
- Foreign income and gains may enjoy 100% relief if qualifying: keep detailed logs of absence from the UK in prior years, origin of investments, and maintain clean non-UK residence.
- OWR may still help on foreign employment income, but only for qualifying periods and capped by either **£300,000** or **30%** of total employment income, whichever is lower. ([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))
- Repatriation approach: TRF offers a reduced rate to bring in historical foreign income/gains. Compare paying the TRF rate vs leaving assets abroad (consider exchange risk, asset growth, etc.)
### After Exiting FIG or Once Full Residence-Based Tax Applies
- Once the 4-year grace period ends (for new arrivals), you should anticipate paying tax on all foreign income & gains as they arise.
- Consider US-style foreign tax credits (if applicable), or tax treaties to reduce double taxation.
- Trusts and IHT planning become more critical: Gifts, lifetime trusts, holding periods, and sheltering assets before becoming long-term resident may help.
## Examples
| Situation | Pre-April 2025 / One-time Move | Under FIG Regime | After FIG Ends / Long-Term Resident |
|---------|-------------------------------|---------------------|--------------------------|
| A nomad becomes UK resident on 1 May 2025 having lived abroad for 12 years | Can qualify for FIG regime immediately; foreign income/gains before move remain under current rules until remitted or under TRF | Can benefit: first 4 years’ foreign income/gains tax-free under FIG | All foreign income/gains taxed as they arise; foreign assets in trust taxed accordingly |
| A digital consultant living abroad decides to relocate now | Uses TRF to bring pre-2025 gains at 12-15%, optimises timing for future contracts | While FIG applies, structuring foreign contracts outside UK-taxable employment may help | Must track foreign income and pay UK tax annually, ensure treaties or reliefs claimed |
## Actionable Insights & Checklists
- **Residency timeline:** Determine your UK tax residency dates, especially whether you qualify for the FIG regime (10 prior non-resident years).
- **Documentation:** Keep records of prior non-UK residence, dates outside UK, income source, foreign bank accounts, trusts, etc.
- **Assess trust use:** Settlor interests and trust structures may lose relief—seek advice before relocating assets.
- **Forecast tax liability:** Run projections under both the old remittance basis vs. the new residence-based tax, including FIG relief, TRF costs, OWR eligibility.
- **Treaties & foreign tax:** Check treaty coverage for double taxation on foreign income/gains; maybe pay foreign tax early to qualify for credits.
## Compliance & Reporting Changes
- From 6 April 2025, **no more remittance basis election**—all non-UK domiciled UK residents report foreign income/gains arising that year.
- Additional reporting for trusts; new guidance expected in UK Finance Bill.
- IHT reporting becomes more complex for non-UK property, assessors, trustees, and long-term resident tail rules apply.
## Bottom Line
For digital nomads, the move from domicile-based to **residence-based** taxation in the UK means rethinking where you live, how you establish tax residence, where you locate assets/trusts, and whether to leverage reliefs like FIG or TRF. Early planning and professional advice are essential—particularly if you're crossing tax jurisdictions, using trusts, or managing foreign income. Taking the right steps now can meaningfully reduce your lifetime tax exposure, simplify compliance, and protect your wealth.