What’s Changing
Effective 6 April 2025, the UK ended the remittance basis of taxation for non-UK domiciled individuals. Instead, a new residence-based regime applies. Under this regime, individuals who become UK tax resident after at least 10 years of non-UK residence may qualify for a four-year relief on foreign income and gains (FIG).(gov.uk)
Overseas Workday Relief (OWR) is retained but simplified.(gov.uk)
Trust structures are more tightly taxed—foreign income and gains in non-resident trusts from 6 April 2025 will generally be taxed in the UK on an arising basis, depending on settlor’s residence history.(gov.uk)
Who’s Affected and in What Way
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New UK residents with 10 years or more outside the UK (prior residence) can receive relief on FIG for their first four UK tax years if they opt in. After that, their worldwide income and gains are taxed.(gov.uk)
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Existing non-doms who were using the remittance basis must transition. If they don’t qualify for the 4-year relief regime, they face taxation on all foreign income and gains. Transitional rules apply including partial relief in the first year and ability to rebase certain assets to 5 April 2019 under specific conditions.(gov.uk)
Examples & Planning Tips for Digital Nomads & High Net-Worth Individuals
| Situation | Implications | What to Consider |
|---|---|---|
| A nomad moving to the UK with a decade abroad, bringing savings/investments | For first four years, FIG earned abroad is largely non-taxable if eligible; after that all worldwide income taxed | Move or realize gains during the relief period; consider timing of investments or trust distributions |
| Income from overseas work (OWR-eligible) | Relief for work days abroad retained but criteria simplified | Maintain records of days worked abroad; consider election into 4-year FIG regime if beneficial |
| Trust beneficiary or settlor of offshore trusts | Increased risk of taxation in UK on trust income or gains once UK resident or when trust distributions match FIG | Review trust structure; consider relocating or restructuring trusts before UK residency takes effect |
Actionable Insights
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Opt-in Timing: If eligible for the 4-year FIG regime, you must formally elect to opt in—don’t delay this decision. Returns for the first year matter.
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Record-Keeping is now more essential than ever: maintain meticulous records of residence days, income sources, trust distributions, and foreign assets.
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Asset Rebase Opportunities: For certain personally held foreign assets, non-domiciled individuals may rebase to their 5 April 2019 value if meeting conditions. This could reduce capital gains exposure.(gov.uk)
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Tax Residency Counseling: Evaluate whether dual residency situations or potential UK residency could trigger broader tax exposure—seek advice early.
Broader Impacts
This policy signals the UK’s shift toward residence-based taxation seen elsewhere, reducing reliance on domicile rules. It aims to balance fairness (residents taxed similarly) with ability to attract global talent. For digital nomads, UK expats, and HNWIs, the regime requires strategic migration and structuring decisions to optimize tax outcomes.