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Non-dom in UK today

 


The traditional UK non-domicile (non-dom) tax regime was officially abolished on 6 April 2025. In 2027, cross-border individuals living in the UK operate entirely under the new residence-based tax framework.

How you are taxed in 2027 depends on whether you are a new arrival, a continuing resident, or managing pre-2025 offshore funds.

Regime ElementPre-April 2025 RulesRules in Effect for 2027
Core StatusDomicile-basedStrictly residence-based (Statutory Residence Test)
New Arrivals ReliefRemittance basis (indefinite, subject to annual charges)4-Year Foreign Income & Gains (FIG) Regime
Tax on Worldwide IncomeOnly on remittance to the UKWorldwide arising basis once outside the 4-year FIG window
Historic Offshore FundsTaxed up to 45% upon transfer to the UKTemporary Repatriation Facility (TRF)
Inheritance Tax (IHT)Based on domicile & deemed domicileWorldwide estate exposure after 10 years of UK residence

1. The 4-Year Foreign Income & Gains (FIG) Regime

  • Eligibility: Applies to individuals who become UK tax resident after at least 10 consecutive tax years of non-UK residence.

  • The Exemption: For the first 4 tax years of UK tax residence, qualifying foreign income and foreign capital gains are 100% exempt from UK tax.

  • Free Remittance: Unlike the old rules, you can bring this money into the UK without triggering any tax charges.

  • Trade-off: Claiming the FIG regime forfeits your UK Income Tax personal allowance and the annual CGT exemption for that year.

2. Long-Term Residents (Arising Basis)

  • If you have lived in the UK for more than 4 tax years (including those who transitioned through the 2025 reform), you are taxed on the worldwide arising basis.

  • All global income and capital gains arising in 2027 must be reported on your UK Self Assessment tax return and are taxed at ordinary UK income tax (up to 45%) and CGT rates, regardless of whether funds enter the UK.

3. Temporary Repatriation Facility (TRF) — The 2027 Rate Hike

  • The TRF applies to former non-doms holding unremitted foreign income and capital gains accrued before 6 April 2025.

  • Rate for the 2026/27 tax year (up to 5 April 2027): 12% flat charge.

  • Rate for the 2027/28 tax year (starts 6 April 2027): 15% flat charge.

  • No physical transfer required: You can designate qualifying funds on your tax return, pay the flat 15% charge (or 12% if designated for 2026/27), and leave the funds offshore indefinitely to be brought to the UK tax-free later.

  • Note: The TRF closes permanently on 5 April 2028, after which historic funds face ordinary rates up to 45% if remitted.

4. Inheritance Tax (IHT)

  • UK IHT is decoupled from domicile. You are considered a long-term resident for IHT once you have been UK resident in at least 10 out of the last 20 tax years.

  • Once you meet that 10-year threshold, your worldwide estate is subject to 40% UK IHT.

  • Leaving the UK triggers a "tail provision" where you remain within the scope of worldwide IHT for between 3 to 10 years depending on how long you resided in the UK.

To assess your specific tax exposure, consider:

  1. Your arrival date: Did you move to the UK recently (potentially inside the 4-year window), or are you a long-term resident?

  2. Offshore balances: Do you hold untaxed pre-April 2025 funds that could be designated under the TRF before the window closes in 2028?

  3. UK tenure: How many of the past 20 years have you spent in the UK for Inheritance Tax purposes?

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