Non-dom reforms

Mar 11, 2024

The remittance basis tax relief offered to non-UK domiciled individuals (non-doms) will be removed and replaced with a simpler residence-based regime from 6 April 2025.

The new system will ensure that all UK residents who stay in the UK for over four years will pay the same tax on their foreign income and gains, regardless of their domicile status.

Individuals arriving in the UK who opt into the new regime and have been non-UK resident for a period of ten consecutive years will be able to claim full tax relief on foreign income and gains for the first four years of UK tax residence.

Existing non-doms who have been tax resident in the UK for less than four years can opt into the new scheme and claim full foreign tax relief until the end of their fourth year of tax residence.

After the first four years they will pay UK tax on their foreign income and gains, as is the case for other UK residents.

Transitional arrangements for existing non-doms will be in place, including an option to rebase the value of capital assets to 5 April 2019 and a temporary 50% exemption for the taxation of foreign income for the first year of the new regime (2025-26).

A two-year temporary repatriation facility will be available for individuals who have paid tax on the remittance basis prior to 6 April 2025 allowing them to bring previously accrued foreign income and gains into the UK at a 12% rate of tax.

If you are a non-UK domiciled UK taxpayer and you have foreign income and gains, contact us to discuss whether this change will affect you.

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