Investing as a UK Non-Domiciled Individual: Tax Rules, Structures and Strategies

The UK's tax treatment of non-domiciled individuals — those who live in the UK but whose permanent home ("domicile") is considered to be in another country — has undergone its most fundamental change in decades. The Finance Act 2025 abolished the remittance basis of taxation and replaced it with a new "foreign income and gains" (FIG) regime from 6 April 2025. This guide explains the new rules, the transition provisions for those previously claiming the remittance basis, and the key planning considerations for internationally mobile HNW investors.

This guide is for general information purposes only and does not constitute tax advice. UK tax law is complex, changes frequently, and interacts with the tax laws of other jurisdictions in ways that require professional advice specific to your circumstances. Always consult a qualified UK tax adviser with international expertise.

---

Background: The Old Remittance Basis

Until 5 April 2025, UK non-domiciled individuals had the option to be taxed on a remittance basis: paying UK income tax and capital gains tax only on:

1. Income arising in the UK (employment income for UK work, UK rental income, UK bank interest, dividends from UK companies, etc.)
2. Foreign income and gains remitted to the UK — brought to the UK or used for UK purposes

Foreign income and gains that remained "offshore" (unremitted) were not subject to UK tax, unless and until remitted. This created a powerful planning tool: non-doms with substantial offshore assets could accumulate income and gains offshore, investing and spending outside the UK without triggering UK tax.

The remittance basis was not free. Non-doms who had been UK resident for 7 of the prior 9 tax years were required to pay an annual Remittance Basis Charge (RBC) of £30,000 (or £60,000 for those resident 12 of the prior 14 years) to maintain access to the remittance basis. For those with large offshore portfolios, the RBC was often well worth paying.

The remittance basis was also technically complex — "remittance" was broadly defined to include indirect use of offshore funds for UK purposes (paying UK bills with a credit card serviced from an offshore account, for instance), requiring careful structuring and record-keeping.

---

The New Foreign Income and Gains (FIG) Regime from April 2025

The new FIG regime works differently. For individuals who are:

• Non-UK domiciled, AND
• New arrivals to the UK (have not been UK resident in any of the 10 tax years immediately prior to their arrival)

...there is a 4-year exemption from UK tax on foreign income and gains. For the first four tax years of UK residence, all foreign income and gains are completely exempt from UK income tax and CGT, regardless of whether they are remitted to the UK or not. No RBC to pay, no remittance restrictions — simply tax-free access to foreign income and gains for four years.

After the 4-year FIG window, individuals become subject to UK tax on worldwide income and gains in the normal way — the same as a UK-domiciled individual.

Who Benefits Most from the New Regime?

The new 4-year regime is significantly more generous than the old remittance basis for new arrivals who plan to stay in the UK for a limited period (under 4 years), because:

• No RBC payment required
• Remittance to the UK is permitted without tax during the 4-year period
• Significantly reduced compliance complexity

For individuals who plan to remain UK resident for longer than 4 years, the new regime is typically less favourable than the old remittance basis (which could continue indefinitely subject to the RBC, and was particularly valuable for very long-term residents who had accumulated large offshore pools of income).

---

Transitional Provisions for Former Remittance Basis Users

The government provided two key transitional reliefs:

Temporary Repatriation Facility (TRF) 2025–2027

Former remittance basis users who accumulated untaxed foreign income and gains ("RBC pools") prior to 6 April 2025 can bring those funds to the UK at a reduced tax rate during the TRF window:

• Tax years 2025/26 and 2026/27: 12% flat rate on designated amounts
• Tax year 2027/28: 15% flat rate (final year of TRF)

This is a significant one-time opportunity for former non-doms with substantial offshore pools to regularise their position at a material discount to normal marginal rates (up to 45% income tax, 24% CGT). The TRF designation can apply to income, capital gains, and mixed funds.

Anyone who used the remittance basis prior to April 2025 and has offshore pools of untaxed foreign income or gains should consult their tax adviser urgently about whether to use the TRF before it closes in April 2028.

CGT Rebasing

Former remittance basis users who held foreign assets as at 5 April 2017 may benefit from a CGT rebasing to the market value on that date for the purposes of calculating UK CGT. This prevents the entire pre-2017 gain from being brought into charge under the new worldwide taxation rules. The availability and mechanics of rebasing depend on whether the remittance basis was claimed and the nature of the assets. Detailed advice is essential.

---

Ongoing Planning Considerations Under the New Rules

For Individuals Within the 4-Year FIG Window

The 4-year window is a genuine planning opportunity:

Portfolio restructuring: With no UK tax on foreign income and gains for 4 years, individuals can crystallise offshore gains (selling appreciated assets to rebase for UK CGT purposes), restructure investment portfolios, repatriate funds, and reorganise offshore structures without UK tax cost. This planning is time-limited — it should be executed within the 4-year window.

Remittance freedom: Unlike the old remittance basis, foreign income and gains can be freely remitted to the UK during the FIG period. Property purchases in the UK, UK spending, UK investments — all can be funded from offshore without triggering tax. This significantly simplifies cash management.

ISA and SIPP contributions: UK tax wrappers (ISA, SIPP) remain available during the FIG period and provide valuable future tax sheltering for returns on UK-sourced funds.

For Long-Term UK Residents Post-FIG Period

After the 4-year FIG exemption expires, individuals become taxable on worldwide income and gains like UK-domiciled individuals. Planning at this stage focuses on:

Offshore company structures: In some circumstances, holding investment portfolios through offshore companies can defer UK tax — income and gains accrue in the company and are not subject to UK personal tax until distributed. However, HMRC's "Transfer of Assets Abroad" (ToA) rules, "attribution of gains" rules, and Controlled Foreign Company (CFC) rules all limit the scope for avoidance. Professional advice is essential — these structures, if improperly implemented, create serious tax risks.

UK-resident trust implications: UK residents who benefit from offshore trusts face specific attribution rules. Post-April 2025, income and gains in offshore trusts can be attributed to UK-resident beneficiaries under the revised rules. Trust structures established before April 2025 have different treatment from those established after. Again, specialist advice is essential.

Domicile status review: Domicile is a legal concept distinct from residence. An individual can retain a foreign domicile of origin even after long UK residence, though this becomes harder to sustain and may be challenged by HMRC. Individuals approaching 10 years of UK residence should review their domicile status carefully.

---

Offshore Investment Structures

Internationally mobile investors often hold investment assets through offshore structures. These remain relevant under the new rules in specific circumstances:

Offshore Investment Bonds

An offshore investment bond (typically issued from Irish or Isle of Man insurance wrappers) can be efficient for individuals who:

• Plan to return to a lower-tax jurisdiction in future
• Have a long investment horizon with no near-term withdrawal requirements
• Are UK resident but may leave the UK before taking benefits

Income and gains within the bond accumulate without annual UK tax charge under the "gross roll-up" mechanism. Tax only arises on surrender or part-surrender. Timing a surrender after leaving the UK — or in a low-income year — can significantly reduce the total tax cost. The "5% withdrawal rule" allows up to 5% of the initial premium to be withdrawn annually without immediate tax.

Note: Following the April 2025 changes, offshore bond structures previously used specifically to shelter foreign income from the remittance basis charge are less relevant. The specific planning merits should be assessed on current rules.

Offshore Pension Arrangements

Some internationally mobile individuals hold retirement savings in overseas pension arrangements — QROPS (Qualifying Recognised Overseas Pension Schemes), US 401(k) plans, Swiss Pillar 2, etc. The UK tax treatment of overseas pension income depends on tax treaties and the specific arrangement. The QROPS rules have been tightened significantly in recent years, and transfers from UK pensions to overseas arrangements carry strict conditions and potential tax charges.

---

Practical Checklist for Non-Domiciled Investors

1. Confirm your current residency and domicile status with a UK tax adviser.
2. Determine whether you are within the 4-year FIG window (new arrival from April 2025 onwards) or a former remittance basis user.
3. If a former remittance basis user: quantify offshore income and gains pools and assess TRF window opportunities before April 2028.
4. Review offshore portfolio structures for ongoing compliance with UK rules under the new regime.
5. Assess whether offshore investment bonds or other structures are appropriate for your current circumstances.
6. Ensure UK investments are held in the most tax-efficient structure: ISA and SIPP for eligible investments.
7. Obtain country-specific advice from advisers in each jurisdiction where you hold assets or have reporting obligations.

---

How Global Investments Can Help

Global Investments works with internationally mobile HNW clients navigating the UK's non-domicile tax regime. We can help you understand the investment implications of your tax status, identify the most appropriate structures for holding international assets, and ensure your portfolio is organised efficiently within the rules applicable to your residency and domicile position. We work alongside specialist tax counsel and can introduce you to UK and international tax advisers with relevant expertise where needed.