If you’re living in the UK but your permanent home is overseas, your non-domiciled ("non-dom") tax status may be about to change. On 6 April 2025, the government will overhaul the current non-dom tax regime, impacting how foreign income and gains are taxed in the UK.
At Tax City UK, we keep ahead of changes like these so you can stay compliant, confident, and informed.
What Is a Non-Dom?
A non-dom (short for "non-domiciled") is someone who is UK resident but whose permanent home, or domicile, is in another country. This is a tax status and shouldn’t be confused with terms like “non-resident,” “citizenship,” or “nationality.”
Non-doms have historically benefited from the remittance basis of taxation, meaning they only pay UK tax on:
UK-sourced income and gains
Foreign income and gains only if brought into the UK ("remitted")
This is very different from UK domiciled individuals, who are taxed on their worldwide income and gains, regardless of where the money ends up.
What Is Domicile?
Unlike tax residency, which is usually based on time spent in the UK, domicile is more complex. It's about where your permanent home is and can depend on your family background and intentions.
There are two main ways someone may be considered non-domiciled:
Domicile of Origin – For example, if you were born abroad, or if your father was from a different country.
Domicile of Choice – If you’re over 16 and have left the UK permanently to live in another country.
However, since 2017, certain long-term UK residents have no longer been able to claim non-dom status. You may be deemed UK domiciled if:
You were born in the UK
Your domicile of origin was the UK
You’ve been UK resident for at least one tax year since 2017
You've been resident in 15 of the last 20 UK tax years
Current Rules: The Remittance Basis and Charges
At present, the remittance basis applies if your foreign income exceeds £2,000 per tax year and you choose not to pay UK tax on it. However, there's a charge for using this basis:
£30,000 if you’ve been UK resident for 7 of the last 9 tax years
£60,000 if you’ve been UK resident for 12 of the last 14 tax years
These charges are paid to HMRC to maintain non-dom tax treatment.
What’s Changing from 6 April 2025?
Chancellor Jeremy Hunt announced the abolition of the existing non-dom regime, to be replaced with a new system from the 2025/26 tax year. The key changes are:
The remittance basis will be phased out
All UK residents, regardless of domicile, will eventually be taxed on their worldwide income and gains
However, there will be a new four-year foreign income and gains (FIG) regime:
Individuals who become UK resident after 5 April 2025 can benefit from a four-year window where their foreign income and gains will not be subject to UK tax
After four years, they will be taxed like other UK residents, on worldwide income
What About Existing Non-Doms?
For those who are already UK resident and claiming non-dom status, there will be a two-year transition period. During this time:
You’ll be encouraged to bring foreign income into the UK under transitional tax rules
After the two-year window, you’ll be taxed on worldwide income like any other UK resident
The aim is to smooth the shift to the new rules while giving existing non-doms time to adjust.
How Tax City UK Can Help
These upcoming changes may have significant tax implications, particularly for individuals with substantial overseas income or assets.
At Tax City UK, we specialise in UK personal tax returns for residents, non-residents, and non-domiciled individuals. We stay on top of developments like these and ensure your tax return is accurate, compliant, and tailored to your circumstances.
Whether you're unsure how the new rules affect you, or you just want peace of mind that your return has been done right, our fixed-fee services are here to help.