Non-doms regime abolished
As expected, the Chancellor has confirmed the abolition of the generous tax regime enjoyed by non-UK-domiciled individuals, or ‘non-doms’
Broadly, the current rules apply to a UK resident whose permanent home - or domicile - for tax purposes is outside the UK. These individuals do not pay UK tax on money they make elsewhere in the world that is not remitted to the UK.
The current rules will end on 5 April 2025 and be replaced by a new regime based on residence, under which foreign income and gains (FIG) will be exempt for the first four tax years of residence. FIG relief will apply only if the individual has not been resident in the UK for at least the last ten years.
Individuals will need to claim FIG relief in their self assessment tax return.
Non-doms also benefit from inheritance tax (IHT) relief, as their worldwide assets are generally exempt from IHT. This will be replaced with a new residence-based IHT system from 6 April 2025.
Transitional arrangements will apply for capital gains tax purposes. For disposals on or after 6 April 2025, current and past remittance basis users who do not benefit from FIG relief can, subject to certain conditions, rebase assets for CGT purposes to their values at 5 April 2017.
If you are domiciled overseas for tax purposes, contact us to discuss what these changes will mean for you.