Spring Budget 2024 Non Domicile Rules Abolished

Published / Last Updated on 06/03/2024

Currently, there are non-UK domiciled rules on taxation for people that may have been born overseas or to overseas parents and have moved to the UK to live and work but are not classified as ‘UK Domiciles’ i.e., planning to live permanently in the UK and remain for the rest of their lives in the UK.

Read:  Non Domicile  Watch: Non Dom Bens  and Res v Dom

The Non-UK Domicile Rules (non-dom) will be replaced from 6 April 2025 with a new 4-year Foreign Income and Gains (FIG) Regime for individuals who become UK tax resident after a period of 10 tax years of non-UK residence.  Qualifying individuals will not pay tax on FIG arising in the first 4 tax years after becoming UK tax resident and will be able to bring these funds to the UK free from any additional charges.

6 April 2025 – New Residence Based FIG Regime

When you come to the UK, no taxes will be payable on worldwide gains or income for 4 years, then you will pay fill UK income and gains taxes on worldwide assets after that period.

To qualify, you must have been none resident in the UK for the last 10 years.

Transitionary Rules - The government will introduce the following transitional arrangements for existing ‘non-doms’ claiming treatment as a remittance basis user (RBU) see:  Foreign Domicile in UK

  • an option to rebase the value of capital assets to 5 April 2019.
  • 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 to bring previously accrued foreign income and gains into the UK at a 12% rate of tax.

Inheritance Tax:

The government with consult on a residency-based regime for inheritance tax (IHT).  Does this mean by being non-UK resident, there will be no IHT on UK assets – i.e.  it will encourage investment in UK from overseas?

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