From 6 April 2025, the UK’s tax system is undergoing a seismic shift.
The long-standing non-dom regime – once a major draw for wealthy expatriates and international investors – is being scrapped in favour of a residence-based system.
In simple terms, if you live in the UK, you’ll be taxed on your worldwide income, regardless of where it’s earned.
For non-doms and British expatriates hoping to return to the UK, this overhaul is going to have a major impact.
Here’s what you need to know:
- Global taxation for UK residents – No more remittance basis; all UK residents will be taxed on their worldwide income and gains from 6 April 2025.
- Abolition of the remittance basis – No more keeping offshore income tax-free unless brought into the UK.
- New four-year foreign income and gains (FIG) regime – A short-term tax break for those moving to or returning to the UK after ten years of non-residence.
- Temporary Repatriation Facility (TRF) – A window to bring offshore funds into the UK at reduced tax rates.
- Capital Gains Tax (CGT) rebasing – Some assets owned by previous remittance basis users will be taxed based on their value as of 5 April 2017, rather than their original purchase price.
- Inheritance Tax (IHT) shake-up – Domicile will become largely irrelevant, with IHT moving to a residence-based system.
These aren’t just minor adjustments; they mark the end of an era for tax planning in the UK.
Who can still benefit?
The Government is throwing a small bone to those affected – the four-year FIG regime.
If you become a UK tax resident after ten consecutive years abroad, you’ll get a four-year grace period where foreign income and gains won’t be taxed in the UK.
However, you’ll lose the Income Tax personal allowance and CGT annual exemption.
This is a significant (if short-lived) benefit for British expats returning home, as well as international professionals moving to the UK, but it won’t replace the long-term tax efficiencies that the non-dom regime once offered.
CGT rebasing: A limited opportunity
For individuals who claimed the remittance basis between 2017/18 and 2024/25, some relief is available.
Their assets will be rebased to their 5 April 2017 value, potentially reducing the CGT payable on future sales.
However, trusts that already benefited from 5 April 2008 rebasing won’t get a second bite at the cherry.
If you hold assets that have gained substantial value since 2017, you may be able to mitigate your CGT exposure.
But if your wealth is tied up in structures that don’t qualify for rebasing, this could be a major tax headache.
The Temporary Repatriation Facility
For those with offshore income and gains still sitting outside the UK, the TRF provides a brief window of opportunity:
- 12 per cent tax rate for remittances in 2025/26 and 2026/27.
- 15 per cent tax rate for remittances in 2027/28.
For individuals with significant offshore assets, this is one of the few remaining tax-efficient ways to bring money into the UK.
However, whether this opportunity makes financial sense depends on your specific circumstances, and you’ll need to act fast before the rates go back to normal.
What should you do now?
With these changes just around the corner, time is running out to prepare.
Your best bet of preparing for the changes includes:
- Reassessing your tax strategy – How will worldwide taxation impact your liabilities?
- Reviewing offshore assets – Should you restructure before April 2025 to minimise tax exposure?
- Planning repatriation – Does the TRF present an opportunity to bring offshore funds into the UK at a lower tax rate?
The reality is that the non-dom regime’s abolition will make the UK less attractive for international wealth.
Some may choose to leave, while others will need to rethink their approach.
Either way, failing to plan now could be a costly mistake.
