UK non-dom tax 2026: how the April 2025 reforms changed everything

Expat Finance

TL;DR

The UK's non-domicile (non-dom) tax system was fundamentally reformed from 6 April 2025. The old domicile-based remittance basis has been replaced with a residence-based Foreign Income and Gains (FIG) regime. New UK residents receive a four-year exemption on foreign income and gains; after four years of UK residence, foreign income and gains become fully taxable on an arising basis like any other UK resident. The old concept of deemed domicile has been abolished and replaced with the long-term resident (LTR) test for IHT purposes.

Key facts (2026)

From 6 April 2025, the remittance basis of taxation for non-UK domiciliaries is abolished; it is replaced by the Foreign Income and Gains (FIG) exemption available to eligible new UK residents for four consecutive tax years (Finance Act 2025).
The FIG exemption applies to individuals who have not been UK resident in any of the 10 tax years immediately before the tax year in which they become UK resident; they are not taxed on foreign income and gains for their first four years of UK residence regardless of whether those amounts are remitted to the UK (HMRC FIG guidance, 2025).
After the four-year FIG period ends, all worldwide income and gains are taxable in the UK on an arising basis (as they accrue), regardless of whether remitted; there is no further remittance basis option available (Finance Act 2025).
A Temporary Repatriation Facility (TRF) allowed former remittance basis users to bring pre-April 2025 foreign income and gains to the UK at a reduced rate of 12 percent in 2025/26 and 15 percent in 2026/27, rather than at full marginal rates; this facility applied for a limited transitional window (HMRC TRF guidance, 2025).
The IHT long-term resident (LTR) test (10 of the last 20 tax years of UK residence) replaces deemed domicile from April 2025; former non-doms who have been UK resident for fewer than 10 of the last 20 years are not LTRs and are subject to UK IHT on UK-sited assets only (Finance Act 2025).

The old remittance basis: what existed before April 2025

Before 6 April 2025, non-UK domiciliaries resident in the UK could elect the remittance basis of taxation: paying UK income tax and CGT only on foreign income and gains actually brought into the UK (remitted), rather than on all worldwide income and gains as they arose. UK-source income was always taxed on the arising basis. The remittance basis election cost the taxpayer their personal allowance and CGT annual exempt amount for the year of election; those resident in the UK for seven of the previous nine tax years paid an additional Remittance Basis Charge (RBC) of £30,000 per year, rising to £60,000 after 12 years of residence. The remittance basis was widely used by wealthy internationally mobile individuals who maintained assets and income outside the UK and had not yet acquired UK domicile. It represented one of the most significant tax advantages available in the UK's personal tax system.

The FIG exemption: how the new four-year regime works

The Foreign Income and Gains (FIG) exemption provides an automatic exemption from UK tax on foreign income and gains for eligible new residents during their first four consecutive tax years of UK residence. Eligibility requires that the individual was not UK resident in any of the 10 tax years immediately preceding the first year of UK residence. This 10-year prior non-residence requirement means that someone who lived in the UK, left, and returned within 10 years would not qualify for the FIG exemption on their return. During the FIG period, foreign income and gains - wherever they arise - are exempt from UK income tax and CGT without any requirement to keep them outside the UK. This is a simpler and more certain regime than the old remittance basis because it does not require tracking remittances or maintaining complex offshore structures to avoid inadvertent UK connections.

After the FIG period: the arising basis applies in full

When the four-year FIG period expires, the individual moves onto the arising basis of taxation like any other UK resident: all worldwide income and gains are taxable in the UK as they accrue, regardless of whether they are brought into the UK. There is no election, no remittance basis, and no reduced charge available beyond year four. This represents a fundamental change from the old system, where the remittance basis could be maintained indefinitely (at increasing cost) for those who retained non-UK domicile. Former non-doms who became resident in the UK more than four years before April 2025 and were on the remittance basis transitioned directly to the arising basis from 6 April 2025; they had limited transitional relief through the Temporary Repatriation Facility and other specific provisions set out in Finance Act 2025 schedules.

The Temporary Repatriation Facility: bringing old money to the UK

Former remittance basis users who had accumulated foreign income and gains outside the UK under the old regime faced the challenge that these amounts would be taxable at full marginal rates if brought to the UK after April 2025. The Temporary Repatriation Facility (TRF) provided a transitional window: eligible amounts of pre-April 2025 foreign income and gains could be designated and brought to the UK at reduced rates of 12 percent in the 2025/26 tax year and 15 percent in the 2026/27 tax year, rather than at full income tax or CGT rates. Eligible individuals who held significant offshore accumulations and intended to bring funds to the UK were advised to use the TRF window; those who did not act within the window faced higher rates on any future remittances or arising basis charges on offshore income.

IHT and the long-term resident test: the new framework

The IHT reform that accompanied the income tax changes is equally significant. The old deemed domicile rules (which treated someone as UK-domiciled for IHT after 15 of the last 20 years of UK residence) have been replaced by the Long-Term Resident (LTR) test, which applies after 10 of the last 20 tax years of UK residence. LTRs are subject to UK IHT on their worldwide assets; non-LTRs face UK IHT only on UK-sited assets. A tail period applies to departing LTRs: those who leave the UK after acquiring LTR status remain subject to worldwide IHT for a number of years proportionate to the length of their UK residence, up to a maximum tail of 10 years. Former non-doms who were not yet deemed domiciled under the old rules (had not reached 15 years of UK residence) may now become LTRs earlier under the 10-year threshold - a potentially adverse change for those between 10 and 15 years of UK residence.

Planning for new arrivals under the FIG regime

New arrivals who qualify for the FIG exemption (no UK residence in any of the 10 preceding years) should take the following steps in the early years of UK residence: document the 10-year prior non-residence period to establish FIG eligibility; review the structure of offshore investments to ensure they are positioned to be tax-efficient before the FIG period ends; plan significant disposals of offshore assets or income realisations to fall within the four-year window where possible; and engage specialist UK tax advice to understand the interaction between the FIG regime, any double taxation treaties with the country of origin, and the IHT position. The FIG regime is simpler than the remittance basis in its administration, but the four-year cliff - after which full worldwide taxation applies - requires careful planning in years three and four to avoid unexpected tax liabilities when the exemption expires.

How the reforms affect existing UK residents who were on the remittance basis

Individuals who were using the remittance basis before April 2025 but had fewer than four years of UK residence at that date received credit for their existing UK residence years toward the FIG period. Those with fewer than four prior years of UK residence continued on FIG for the balance of the four-year window. Those with more than four years of UK residence immediately transitioned to the arising basis from April 2025. The transitional provisions in Finance Act 2025 Schedule 2 provide specific rules for different cohorts depending on their prior residence history, remittance basis charge position, and IHT deemed domicile status. The provisions are complex and fact-specific; any affected individual should seek specialist advice rather than applying general guidance to their particular situation.

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Frequently asked questions

Does the FIG exemption apply to UK-source income?

No. The FIG exemption applies only to foreign income and gains. UK-source income - employment income earned in the UK, rental income from UK property, UK bank interest, UK dividends - is taxable on the arising basis from the first day of UK residence, regardless of FIG status. The exemption is specifically for income and gains with a foreign source.

What counts as a tax year of UK residence for the 10-year prior non-residence requirement?

UK tax residence is determined under the Statutory Residence Test (SRT), introduced in 2013. Each tax year (6 April to 5 April) in which you were UK resident under the SRT counts toward the 10-year period. For years before the SRT (before 2013/14), HMRC's predecessor rules determine residence. The 10-year lookback covers the 10 consecutive tax years immediately before the first year of UK residence; if you were resident in any one of those years, you do not qualify for FIG.

I arrived in the UK in September 2024. Am I eligible for the FIG exemption?

If 2024/25 was your first year of UK residence and you had not been UK resident in any of the 10 tax years from 2014/15 to 2023/24, you are eligible for the FIG exemption from 2024/25 (the April 2025 reforms apply from 6 April 2025, but the FIG rules provide credit for the 2024/25 year if it was your first qualifying year). Your FIG exemption would cover 2024/25, 2025/26, 2026/27 and 2027/28 - four years total. From 2028/29, the full arising basis applies. Confirm your specific position with a UK tax adviser as the transitional provisions interact with the FIG period in several ways.

Do I still need to complete a self-assessment return under FIG?

Yes. Individuals who are UK resident must complete a self-assessment return if they have income above de minimis thresholds or other qualifying criteria. Under FIG, the return should reflect UK-source income and, separately, the claim for FIG exemption on foreign income. HMRC has updated its self-assessment guidance and forms to accommodate FIG claims; professional advice is strongly recommended for the first year of FIG returns to ensure the claim is correctly structured.

What happens to my offshore trusts under the new regime?

The trust position is substantially more complex than the individual position. Former excluded property trusts settled by non-doms before April 2025 are subject to transitional provisions; the FIG regime does not extend to trust structures in the same way as it does to individuals. Trust income and gains distributed to UK-resident beneficiaries may be taxable depending on the trust's structure and the specific transitional provisions applicable. Tax treaty interactions further complicate the analysis. This is one of the areas where specialist legal and tax advice is most critical and where the consequences of incorrect treatment are potentially largest.

How we verified this guide

FIG exemption structure and eligibility conditions were confirmed from the Finance Act 2025 and HMRC's published FIG guidance. TRF rates and timing were confirmed from HMRC's TRF guidance. LTR test for IHT was confirmed from Finance Act 2025 Schedule 1. Transitional provisions for existing remittance basis users were confirmed from Finance Act 2025 Schedule 2.

Disclaimer: This guide is information only, not financial, legal or tax advice. Rates, allowances and rules change. Always check the primary sources cited and consult a regulated adviser for decisions about your own circumstances.

Primary sources

Last reviewed: May 2026.