What Changed for Non-UK Domiciled Individuals
From 6 April 2025, the UK formally abolished the remittance basis for non-domiciled (non-dom) individuals. In its place, the Foreign Income & Gains (FIG) regime applies to those becoming UK tax residents who have previously resided outside the UK for 10 tax years. (gov.uk)
Key features:
- A four-year exemption for FIG for qualifying individuals—no UK tax on foreign income or gains during that period, nor on non-resident trust distributions. (gov.uk)
- If not eligible for FIG, remittance basis users transition via reduced rates (e.g. 50% tax on foreign income) for the 2025-26 tax year only. After that, all worldwide income and gains are taxed on the arising basis. (gov.uk)
Implications for Digital Nomads and Movers
Digital nomads, long-term remote workers, or individuals who are mobile internationally should consider the following planning points:
Tax Residence Timing
- Planning arrival dates matters—eligibility for FIG depends on prior non-UK residence for 10 years. Arriving before or after an accounting year change may affect the 4-year exemption period.
Repatriation Decisions
- Foreign income & gains generated before the residency date may still be exempt under FIG. Bringing them to the UK during exemption period can be tax-neutral if they fall under FIG.
- Post-FIG or non-eligible individuals will be liable on worldwide income as soon as they become UK tax resident after their FIG window ends.
Trust and Inheritance Tax Changes
- Non-dom individuals will no longer benefit from remittance basis in trust distributions.
- Inheritance Tax moving from domicile basis toward residence basis—assets outside UK may be more exposed. (gov.uk)
Practical Tax Planning Strategies
- Consider staying non-resident for longer if eligibility for FIG is within reach.
- Sequence income and gains before arrival where legally possible, taking advantage of FIG’s exemption period.
- Review overseas trusts or structures, especially distributions—pre-resident trusts and those operating post-April 2025 differ in treatment.
- Document the source and timing of income/gains to support eligibility under FIG.
- Seek advice early because transition is complex—missteps can lead to significant unexpected liability.
Case Study
<ins>Case: “Nomad Nina”</ins>
- Has lived abroad for 15 years; plans to become UK tax resident in 2026.
- Under new system, Nina will qualify for FIG: for 4 tax years after arrival she won’t pay UK tax on foreign income & gains, nor need to worry about trust distributions abroad.
- Any income from UK sources or gains realised in UK during that time will still be taxable.
- After four years, all global income/gains will be taxed in UK—so Nina could plan big capital realisations or trust movements either during or before FIG period.
Risks and Traps
- Losing eligibility by not meeting the 10-year prior-residence rule.
- Unregistered trusts or undisclosed foreign gains can cause surprises—especially post FIG exemption.
- Residence status complexities—Statutory Residence Test still applies and has detailed day count and tie rules.
Conclusion
For digital nomads and long-term movers, the transition from remittance basis to FIG is a game-changer. Those who plan residency timing, income sourcing, and foreign structures carefully will gain benefit. The key is acting ahead—well before the four-year exemption window ends.