The April 2025 Non-Dom Reforms: Complete Guide to the New UK Tax Rules

The reforms to the UK tax treatment of non-domiciled individuals that took effect from 6 April 2025 represent the most significant change to this area of law since the remittance basis itself was codified. For internationally mobile individuals and their advisers, understanding the new rules is not merely advisable — it is essential. The wrong course of action in the transitional period could cost substantial sums.

This guide sets out the key changes clearly, explains who is affected, and outlines the main planning considerations. It does not constitute tax advice — the reforms are highly fact-specific, and anyone affected should take specialist professional advice.

What Changed in April 2025

Before April 2025, UK-resident non-domiciled individuals could elect to be taxed on the "remittance basis". Under this system, foreign income and gains were not subject to UK tax unless and until they were remitted to the UK. Non-domiciled individuals who had been UK-resident for 7 of the last 9 years paid a Remittance Basis Charge (RBC) of £30,000 per year for this privilege; those with 12 of 14 years paid £60,000; and those with 15 of 20 years became "deemed domiciled" and lost access to the remittance basis entirely.

From 6 April 2025:

• The remittance basis of taxation no longer applies to any new tax year
• The RBC no longer exists
• The concept of deemed domicile for income and CGT purposes has been abolished
• A new "Foreign Income and Gains" (FIG) regime applies to eligible new arrivals
• A new Temporary Repatriation Facility (TRF) is available for those with historic unremitted funds
• A new Long-Term Residence (LTR) test applies for IHT purposes

The Foreign Income and Gains Regime

The FIG regime is the replacement for the remittance basis for new arrivals. It is, in some respects, more generous than the old remittance basis — and far simpler.

Who qualifies: Individuals who have not been UK tax-resident in any of the 10 consecutive tax years immediately before the tax year in which they become UK-resident. This means a genuine new arrival with a substantial history of non-UK residence.

How it works: During the first four tax years of UK residence, all foreign income and gains are automatically exempt from UK tax — without needing to make a claim, without a remittance basis charge, and without any need to keep the income offshore. The individual can bring funds to the UK freely. The arising basis applies to UK income and gains, but foreign income and gains are simply ignored.

After four years: From the fifth year of UK residence, the arising basis applies in full. All worldwide income and gains are subject to UK tax as they arise. The FIG exemption does not extend beyond the four-year window.

What counts as "foreign income and gains": Foreign employment income (subject to conditions); interest and dividends from non-UK sources; gains on non-UK assets; foreign rental income; and certain other categories of non-UK income. UK-source income and gains are taxed on the arising basis from day one — even in the first four years.

Implications for Different Groups

New arrivals to the UK from 6 April 2025 onwards: Those who qualify for FIG are in a significantly better position than the old remittance basis users in some respects. No RBC, no need to segregate offshore accounts, no need to track remittances. Four years of genuinely free access to foreign income in the UK. The key limitation is that this window closes after four years — so individuals who intend to remain in the UK long-term need a clear plan for what happens after year four.

Existing non-doms who had 1-3 years of remittance basis usage: These individuals lost access to the remittance basis at April 2025 but may qualify for FIG if they have fewer than four years of UK residence. They should review their position carefully to confirm eligibility.

Existing non-doms who had 4+ years of remittance basis usage: These individuals no longer have access to the remittance basis and do not qualify for FIG (which requires a clean 10-year break before arrival). From April 2025, they are taxed on the arising basis — all worldwide income and gains, from day one. This is a significant change for long-term UK-resident non-doms. It has also created significant urgency around the Temporary Repatriation Facility.

Existing non-doms who had become deemed domicile: These individuals were already on the arising basis under the old rules (deemed domicile applied at 15 of 20 years). For them, the change to the arising basis is not new — they were already there. The most significant change is the IHT long-term residence test, which applies the same economic outcome but with a lower threshold.

The Temporary Repatriation Facility

For individuals who previously used the remittance basis and have accumulated unremitted foreign income and gains (funds sitting in offshore accounts that would be taxable on UK remittance), the TRF provides a limited-time opportunity to bring those funds to the UK at preferential rates.

Rates and timing:

• Tax years 2025/26 and 2026/27: 12% on nominated unremitted income and gains
• Tax year 2027/28: 15%
• From 2028/29: TRF closes; historic unremitted funds remain subject to tax on remittance at ordinary rates

How to use it: The individual nominates (elects) specific amounts of historic foreign income and gains to be treated as remitted in the relevant tax year and pays the TRF rate. The funds can then be brought to the UK without further tax charge. This is a one-time use facility — the same funds cannot be nominated twice.

What it does not cover: The TRF applies to personal income and gains. It does not cover income or gains arising within trusts or companies in a straightforward way — the interaction with offshore trust and company income is complex. Specialist advice is essential before using the TRF.

Is it worth it? Whether the TRF is beneficial depends on the individual's circumstances: how much historic unremitted income sits offshore, what it would cost to pay the TRF rate versus the cost of keeping funds offshore indefinitely, whether the individual needs or wants to bring funds to the UK, and what the alternative uses of those offshore funds are. For many individuals with substantial offshore accumulations, the 12% rate available in 2025/26 and 2026/27 represents a very significant discount to ordinary income tax or CGT rates. But it is not universally the right answer — sometimes the better outcome is leaving funds offshore and using them for overseas purposes without ever remitting them.

The IHT Long-Term Residence Test

The IHT changes are, arguably, even more significant than the income and CGT changes for families with substantial wealth. Under the old rules, non-domiciled individuals were subject to IHT only on UK-situs assets until they became deemed domiciled (15 of 20 years' UK residence). From April 2025:

The new test: An individual is a "Long-Term Resident" (LTR) for IHT purposes if they have been UK tax-resident for at least 10 of the 20 tax years immediately preceding the tax year in question. LTRs are subject to UK IHT on their worldwide assets — not just UK assets.

The threshold is lower: The old deemed domicile test required 15 of 20 years. The new LTR test requires only 10 of 20 years. Many individuals who had structured their affairs expecting never to reach deemed domicile status will find they have already crossed the LTR threshold.

The tail: After leaving the UK, an LTR remains subject to IHT on worldwide assets for 10 years after departure — a significantly longer tail than the old 3-year post-departure period for those who had reached deemed domicile.

Who is most affected: Internationally mobile individuals who have spent 10 or more years in the UK without taking specific planning steps before April 2025; families with foreign domiciles who treated their UK period as temporary but have been here longer than expected; and non-EU, non-UK nationals who may not have understood the interaction between UK residence and UK estate tax exposure.

Transitional provisions: Individuals who had not yet reached 15 of 20 years' residence at April 2025 but who were already at 10 of 20 years effectively became LTRs immediately at April 2025, without warning. Existing excluded property trusts (EPTs) established before April 2025 retain their excluded property status for assets already in them — a vital protection for those who took planning steps earlier.

What to Do Now

If you are a new arrival to the UK with less than 4 years of UK residence: Confirm your FIG eligibility; ensure your offshore accounts are clean and segregated from UK income; plan what happens in year five and beyond.

If you are a long-term UK-resident non-dom who was on the remittance basis: Assess your offshore accumulations and consider whether the TRF is appropriate; review your worldwide estate to understand your IHT exposure under the LTR test; consider whether any estate planning steps are urgent.

If you are considering leaving the UK: Understand the 10-year IHT tail if you are an LTR, and plan accordingly.

If you have an offshore trust: Review how the trust interacts with the new rules, particularly the FIG regime and the LTR test for IHT.

This area of law is genuinely complex, fast-moving, and highly individual. What is the right answer for one person may be entirely wrong for another.

How Global Investments Can Help

The April 2025 reforms have made international tax planning for UK-connected individuals significantly more complex. Global Investments advises internationally mobile HNW individuals and families on the practical implications of these changes — from reviewing offshore structures to modelling the IHT impact of the LTR test to assessing whether the Temporary Repatriation Facility represents a good outcome in each client's circumstances. Please speak with one of our advisers as a matter of priority if you have not yet reviewed your position under the new rules.