Non-dom tax change on foreign income and gains - February 7th 2025

From 6 April 2025, UK residents, irrespective of their domicile status, will be taxed on their global income and gains, whether or not remitted to the UK.

New arrivals, however, will benefit from 100% tax relief on foreign income and gains during their first four years of UK residence and will be able to bring overseas income and gains to the UK at any time without a tax charge. This is provided they have not been UK resident in any of the 10 years before their arrival. After the first four years of UK residence, an individual will be fully taxable on their worldwide income and gains.

Non-domiciled individuals who are not new arrivals and have been taxed on the remittance basis should check whether they can benefit from transitional rules. Their foreign income and gains will continue to be taxed if remitted but, under a new temporary repatriation facility, they will be able to designate foreign income and gains that arose before 6 April 2025 as chargeable to UK tax. However Chancellor Rachel Reeves has indicated that this facility will be made more generous.

Amounts designated in 2025/26 or 2026/27 will be taxed at 12%, and 15% if designated in 2027/28. These amounts can then be remitted to the UK without further tax charge. So if you expect to have to bring pre-6 April 2025 income or gains to the UK in the next few years, it is worth making such a designation.