Banking on the Remittance Basis: What Non-Doms Need to Know After the 2025 Reforms

The UK's non-domicile (non-dom) tax regime underwent the most significant reforms in decades, effective from 6 April 2025. The remittance basis of taxation — which allowed non-UK domiciled individuals to pay UK tax only on income and gains remitted to (brought into) the UK, leaving offshore income and gains untaxed — has been replaced with a new framework. For individuals who relied on the remittance basis to structure their banking and investment arrangements, understanding the new landscape is urgent.

This guide does not attempt to provide comprehensive tax advice on non-dom status — that requires specialist legal and tax counsel. It does explain the key changes, their practical banking implications, and how to approach structuring bank accounts in the new environment.

What Was the Remittance Basis?

Under the old regime (pre-April 2025), a non-UK domiciled individual resident in the UK could elect to be taxed on the remittance basis. This meant:

• UK-source income and gains: taxed in the UK regardless
• Foreign income and gains: only taxed in the UK when remitted (brought into the UK in any form — cash, goods, services, debt repayment)

This created a powerful planning opportunity: non-doms could accumulate foreign income and capital gains offshore without immediate UK tax. The complexity lay in managing what was remitted — an intricate web of rules governed what constituted a "remittance" and in what order different types of income were deemed to be remitted.

The annual remittance basis charge (RBC) applied for those who had been UK-resident for more than seven years: £30,000 per year for 7+ years resident, £60,000 for 12+ years. For individuals with large offshore income, this was still highly advantageous.

The April 2025 Reforms: Key Changes

The reforms fundamentally change the position for non-doms:

End of domicile as the primary test: Domicile (a complex concept of permanent home) is no longer the primary test for UK tax purposes. It has been replaced by a residence-based test.

New Foreign Income and Gains (FIG) regime: New arrivals to the UK (those who have not been UK-resident in any of the previous 10 tax years) may claim a four-year exemption on foreign income and gains. During this four-year period, foreign income and gains are exempt from UK tax even if remitted to the UK — a significant simplification over the old remittance basis, but limited to four years.

Transitional Overseas Workday Relief (OWR): A modified version of the overseas workday relief continues for new arrivals, subject to revised conditions.

Long-term residents and worldwide taxation: After four years of UK residence, individuals are taxed on their worldwide income and gains — the remittance basis is no longer available. There are no longer any ongoing choices to make about remittance.

IHT changes: Individuals who have been UK-resident for ten of the last twenty years are now within scope of UK IHT on their worldwide assets, with a "tail" period of IHT exposure that continues for several years after leaving the UK.

Temporary Repatriation Facility (TRF): For individuals who had previously accumulated offshore income and gains under the remittance basis, a temporary facility allows these pre-6 April 2025 foreign income and gains to be remitted to the UK at a reduced tax rate (12% for 2025–26, 15% for 2026–27) rather than the full marginal rate. This is an important planning opportunity for those with significant "clean" offshore income.

Banking Implications: The New Landscape

The Remittance Mixing Problem No Longer Applies (For New Arrivals)

Under the old regime, the careful segregation of offshore accounts by income type (clean capital, foreign employment income, capital gains, mixed funds) was essential to control what was remitted and at what tax cost. Mismanaging the mixing rules could trigger unexpected UK tax charges.

For new arrivals who qualify for the four-year FIG regime, this complexity no longer applies during the four-year period — all foreign income and gains (regardless of mixing) can be remitted without UK tax. This is a genuine simplification.

For Pre-2025 Arrivals: Continued Complexity

For individuals who were UK-resident before April 2025 and had accumulated offshore income and gains under the old regime, the existing "mixed fund" accounts remain relevant for the Temporary Repatriation Facility:

• Pre-April 2025 offshore income and gains (the "pot") can be remitted at the reduced TRF rate
• Post-April 2025 foreign income and gains of long-term residents are simply taxed on an arising basis — the remittance concept no longer applies

Practically: if you have offshore bank accounts that were managed as "clean capital" accounts under the old regime, they remain relevant for the TRF window. If you have mixed fund accounts containing untaxed foreign income, you may wish to use the TRF to normalise these positions.

Account Structuring for New Arrivals

For an individual arriving in the UK for the first time (no UK residence in the past 10 years), the four-year FIG window provides an opportunity to simplify banking dramatically:

• During the four-year FIG period, you can freely move money between offshore and UK accounts without UK tax cost on foreign income and gains
• After the four-year period, you will be taxed on worldwide income and gains — at that point, holding money offshore does not provide a UK tax advantage, though it may provide other benefits (currency diversification, political risk management, estate planning)

The four-year window is the time to rationalise complex multi-account structures created under the old regime.

UK Bank Account for Day-to-Day Living

Both under the old regime and the new, maintaining a separate UK bank account funded from clean capital (not mixed with untaxed offshore income) is sensible for UK-based individuals. For day-to-day expenses, the source of UK account funds matters less after the reforms for post-2025 arrivals — but documentation of income sources remains important for HMRC self-assessment.

The "Arising Basis" Default

Long-term UK residents (and those who do not claim the FIG exemption, as it requires a positive claim) are now taxed on the arising basis — UK tax on worldwide income and gains as they arise, regardless of where bank accounts are held. This is the position of most UK-domiciled individuals and has always been the case for them.

For this group, the location of bank accounts does not affect UK tax liability (income at a Swiss bank is still UK-taxable). What matters is accurate reporting and efficient structuring to take advantage of double tax treaty benefits, pension exemptions, and legitimate UK tax reliefs.

HMRC Compliance and Offshore Account Disclosure

HMRC receives automatic information about offshore bank accounts through CRS. An individual who has offshore bank accounts and is UK-resident is required to disclose foreign income and gains on their self-assessment return. Failure to do so constitutes tax evasion, with significant penalties.

The key point: the reforms have not reduced the transparency of offshore accounts — if anything, the simplification of the regime makes it easier for HMRC to assess whether individuals are reporting correctly. The complexity that sometimes masked non-disclosure under the old remittance basis (genuine uncertainty about what constituted a remittance) is significantly reduced.

IHT and Offshore Bank Accounts

Under the reformed IHT rules, individuals who have been UK-resident for ten of the last twenty years are subject to IHT on their worldwide assets — including all offshore bank accounts. The definition of a "long-term resident" for IHT purposes now aligns with the extended scope of UK IHT.

If you are approaching ten years of UK residence, IHT planning — including the use of excluded property trusts (which may need to be established before the ten-year threshold is reached) — becomes a priority. Offshore bank accounts held directly (not through a trust or other structure) will be within the UK IHT estate.

Practical Steps

1. Obtain specialist advice immediately if your position has changed under the April 2025 reforms. The transition from the old to new regime creates planning opportunities (TRF) and risks (automatic arising basis treatment) that need case-by-case assessment.
2. Consider the TRF if you have pre-April 2025 offshore income and gains in offshore accounts — the opportunity to remit at 12–15% rather than up to 45% closes after 2026–27.
3. Review offshore account structures with your adviser — complexity that existed for tax reasons under the old regime may now be unnecessary.
4. Ensure HMRC compliance: declare all foreign income and gains arising after April 2025 on your UK self-assessment return if you are UK-resident.

Non-dom tax law is highly complex and the reforms have introduced significant transitional issues. This guide provides a summary only. It does not constitute tax advice. Every individual affected by these reforms should seek advice from a qualified UK tax specialist experienced in non-dom and international tax matters. Tax rules can change further; information in this guide reflects the position as of 2026.

How Global Investments Can Help

Global Investments regularly works with internationally mobile HNW clients — including many who have been affected by the non-dom reforms — on banking, property, and wealth structuring in the UK and across the international markets we work in. We can facilitate introductions to specialist non-dom tax advisers and ensure that your banking arrangements are appropriately documented and compliant. Contact us to discuss your situation.