Non-Dom IHT in the UK Explained After April 2025

The UK non-dom regime was, until 6 April 2025, one of the most distinctive tax features of the international migrant landscape in the UK. Long-resident migrants who retained a foreign domicile of origin (and had not acquired a UK domicile of choice) could shelter their worldwide assets from UK inheritance tax for many years, using excluded property trusts and the remittance basis of taxation. The reform announced in the Spring Budget 2024 and effective from 6 April 2025 abolished the framework entirely and replaced it with a residence-based regime.

This article explains what changed for migrants, what the new regime looks like, and what historic non-dom structures still do (or do not) achieve under the new rules.

The status reform that starts the analysis

Before 6 April 2025, UK inheritance tax exposure on worldwide assets turned on the concept of domicile. A migrant was either UK-domiciled (and exposed to IHT on worldwide assets) or non-UK-domiciled (and exposed only to UK-situated assets, plus the worldwide assets after becoming 'deemed domiciled' through long-term residence). Domicile was determined by common-law principles of permanent home and intention to remain.

From 6 April 2025, that framework was replaced. The test is now purely residence-based: a person is a long-term UK resident, and exposed to IHT on worldwide assets, once they have been UK-resident under the Statutory Residence Test in at least 10 of the previous 20 tax years. The non-dom category, as a concept relevant to IHT, no longer exists.

What the new regime means for migrants in flight

The shift is structural for migrants on long-term visa pathways. Skilled Worker visa holders, Health and Care Worker visa holders, Family visa holders, and Global Talent visa holders who progressed to ILR and then to naturalisation were typically able under the old rules to maintain a non-UK domicile of origin for many years, deferring worldwide IHT exposure. Under the new rules, the residence count starts ticking from the first year of UK tax residence and the 10-year threshold is the operative trigger regardless of intention or origin.

For migrants who arrived in the UK in 2015 and remained continuously UK-resident, the 10-year threshold has already been crossed in tax year 2024/25, and they are long-term UK residents under the new rules from 6 April 2025. For migrants who arrived more recently, the count is accumulating and the threshold will be reached on a date determined by the SRT record.

Excluded property trusts under the new rules

Excluded property trusts settled by a non-UK-domiciled settlor before 6 April 2025 historically held assets outside the UK IHT regime. The new rules treat the IHT position of these trusts differently. The Spring Budget 2024 announcements and the subsequent Finance Act 2025 specify transitional treatment for pre-existing trusts: pre-6 April 2025 settlements where the settlor was not long-term UK resident at settlement remain excluded in narrow transitional circumstances; new settlements made after that date follow the residence-based regime and the settlor's long-term resident status at the time of settlement determines IHT treatment.

Migrants who had excluded property trusts in place before the reform should review the transitional rules carefully with a qualified tax adviser; the trust's protection may not survive the reform in all cases.

The four-year FIG regime for new arrivals

The 6 April 2025 reform also replaced the remittance basis of taxation for non-doms with a new four-year foreign income and gains (FIG) regime. New arrivals to the UK who have not been UK-resident in any of the previous 10 tax years can elect that foreign income and gains arising in their first four UK tax years are not subject to UK income tax or capital gains tax. The FIG regime is time-limited; from year five, all worldwide income and gains are taxable in the standard UK way.

The FIG regime is a separate concession from the IHT residence rules, but the two interact in migrant planning. A new arrival benefiting from the FIG regime in their first four years is also accumulating residence years toward the 10-year IHT threshold during the same period.

The IHT tail for migrants leaving the UK

A migrant who became long-term UK resident and later leaves the UK does not immediately drop out of UK IHT scope. A tail period applies: worldwide assets remain within UK IHT scope for between 3 and 10 years after departure, depending on how long the migrant was UK-resident before leaving. The tail period scales: a migrant who was UK-resident for the minimum 10 of the prior 20 tax years has a 3-year tail; a migrant resident for 20 of the prior 20 tax years has a 10-year tail.

The implication is that emigration alone does not break UK IHT exposure. Pre-departure planning, often including transfers, structures, or use of treaty relief, is essential for managing the tail.

Treaty relief continues to apply

The UK's bilateral estate and inheritance tax treaties with the United States, Ireland, France, India, Pakistan, Sweden, Switzerland, the Netherlands, and South Africa continue to operate alongside the new residence-based regime. The treaties allocate primary taxing rights, define which country can tax which class of assets, and provide credit relief mechanisms.

For migrants from treaty countries, the post-reform planning often combines residence management (controlling the 10-out-of-20 count) with treaty positioning (ensuring that the home country treaty applies effectively). For migrants from non-treaty countries (which is most jurisdictions), unilateral credit relief under UK domestic rules is the primary mechanism for avoiding double taxation.

The interaction with naturalisation and settled status

Naturalisation as a British citizen does not trigger long-term UK resident status by itself. ILR and naturalisation are immigration outcomes; long-term UK resident status under the IHT rules is a tax outcome based on the residence count. The two correlate (most migrants on a path to ILR and naturalisation are also accumulating UK tax residence years) but they are not identical.

This is a key point for migrants who plan to acquire ILR or British citizenship but spend significant periods outside the UK for work or family reasons: the SRT determines UK residence status year by year, and time spent outside the UK can break the residence count.

Pre-arrival and pre-threshold planning

For migrants approaching the UK who anticipate long-term residence, planning before arrival can lock in tax efficiency under the FIG regime and reduce future IHT exposure. Common levers include settling family wealth into appropriate trust structures before arrival, executing lifetime transfers from family members not coming to the UK, and timing UK arrival to maximise the FIG window.

For migrants already in the UK and approaching the 10-year threshold, lifetime transfers before becoming long-term resident can reduce the size of the worldwide asset base exposed to UK IHT. The seven-year IHT clock for potentially exempt transfers continues to apply, so transfers made well before the threshold and the donor surviving seven years can be most effective.

Common pitfalls under the new regime

The most common pitfall is assuming that pre-reform excluded property trust protection continues unchanged after 6 April 2025. The transitional rules are narrow. The second is conflating ILR and naturalisation with long-term UK resident status. The third is underestimating the tail period after emigration. The fourth is failing to use the FIG window during the first four UK tax years where it would deliver substantial relief.

Important: This article is for general information and does not constitute regulated financial advice or legal advice. The non-dom IHT and remittance basis reforms that took effect from 6 April 2025 are substantial and continue to be developed through HMRC guidance and case law. Migrant tax planning, especially involving trusts, lifetime transfers, and pre- or post-arrival structures, benefits from advice from a UK tax adviser experienced in cross-border migrant cases and, where relevant, advice in the relevant foreign jurisdiction.

Frequently asked questions

Are non-doms still a thing for UK inheritance tax?

No, not in their pre-6 April 2025 form. The non-dom category as a concept relevant to UK inheritance tax was abolished from that date and replaced with a residence-based regime. Long-term UK resident status (10 out of the previous 20 tax years of UK residence) is the operative trigger for worldwide IHT exposure.

What happens to my existing excluded property trust?

It depends on the transitional rules. Trusts settled before 6 April 2025 by a settlor who was not long-term UK resident at settlement retain their excluded status only in narrow transitional circumstances. New settlements made after that date follow the residence-based regime. A specialist review is essential.

Does ILR or British citizenship trigger long-term UK resident status?

No, not by itself. ILR and naturalisation are immigration outcomes. Long-term UK resident status is a tax outcome based on the residence count under the Statutory Residence Test. The two often correlate but they are not the same test.

What is the four-year FIG regime?

The four-year foreign income and gains regime replaces the remittance basis of taxation for non-doms from 6 April 2025. New UK arrivals who have not been UK-resident in any of the previous 10 tax years can elect that foreign income and gains in their first four UK tax years are not subject to UK income tax or capital gains tax. It is separate from the IHT residence rules.

How long is the IHT tail after I leave the UK?

Between 3 and 10 years, depending on how long you were UK-resident before leaving. A migrant who was UK-resident for the minimum 10 of the prior 20 tax years has a 3-year tail; a migrant resident for 20 of the prior 20 tax years has a 10-year tail. Worldwide assets remain in UK IHT scope during the tail.

Where can I check the current rules?

The authoritative sources are the HMRC Inheritance Tax Manual, the Finance Act 2025, and the gov.uk inheritance tax pages updated to reflect the 6 April 2025 regime. For visa and residence status, the gov.uk immigration pages and the Statutory Residence Test guidance apply. Specialist advisers can interpret the interaction with treaty relief.