Digital Nomad
UK’s Move to Residence-Based Regime for Non-UK Individuals: What Digital Nomads Should Know
From 6 April 2025, the UK replaced the domiciled/non-domiciled system with a residence-based Foreign Income & Gains regime. Here's what non-UK individuals and digital nomads need to understand.
By NomadicTax Research Team • 5-8 min read • July 11, 2026
## The Shift from Domicile to Residence
- **Old system (Domicile-based)**: Non-UK domiciled individuals could avoid UK tax on foreign income/gains by using the remittance basis. Domicile was a complex legal concept.
- **New system, effective 6 April 2025**: The UK scrapped domicile as a basis, replacing it with a **residence-based regime**. Foreign income & gains (FIG) from non-UK sources are taxable unless remitted under limited transitional relief.([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai))
## Key Features of the New Regime
- **Foreign Income & Gains (FIG) Regime**: Foreign-sourced income is now generally taxed even if it is not brought into the UK (unless specific transitional relief applies).([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai))
- **Temporary Repatriation Facility (TRF)**: Individuals who previously used the remittance basis for pre-6 April 2025 income can designate such amounts. They’ll pay reduced tax rates during a three-tax-year “cooling off” period via the TRF.([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai))
- **Inheritance Tax (IHT)** also aligns with residency—not domicile status any longer.([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/672105124da1c0d41942a8a8/Reforming_the_taxation_of_non-UK_individuals.pdf?utm_source=openai))
## What This Means for Digital Nomads
Digital nomads often move across borders, earning abroad or remotely while spending part of the year in the UK. The changes have major implications:
- If you become _resident_ in the UK, foreign income (salary, freelancing, investments) may now be taxable even if not remitted.
- TRF may offer relief for foreign incomes that accrued pre-April 2025 but was unremitted—must be formally designated.
- Frequent visitors may want to reconsider patterns—number of UK days, nature of stay may trigger tax residence rules.
## Practical Planning Steps
- **Track arrival and departure dates** carefully—statutory residence test matters.
- **Document foreign income source, date accrued vs remitted**—to assess eligibility for TRF and transitional relief.
- **Review income streams** such as remittances, investments, freelance income; adjust timing of remittances if necessary.
- **Consult a UK specialist** familiar with the changes—mistakes can lead to unexpected tax bills.
## Example Scenario
- Sam, born abroad, has been submitting UK returns under remittance basis. As of 6 April 2025, all his income from foreign sources—for instance business income earned abroad—is taxable even if he keeps it overseas. However, his pre-2025 unremitted income can be designated under the TRF for reduced taxation over three years.
**Bottom line:** For digital nomads, the UK’s new residence-based tax framework is designed to be more straightforward but demands awareness. Always assess your residence status, income accruals vs remittance, and timeline of foreign-source income.