UK Non-Dom Regime Changes in 2025: What to Know & How to Prepare

The UK Autumn Budget 2024 was historic in many ways. It was the first delivered by a woman Chancellor and the first by the new Labour Government. It also delivered major changes that all high-net-worth individuals (HNWIs) and globally mobile people must consider. Central to these changes are the UK non-dom regime changes in 2025. These prompt a vital need for strategic planning.

This post will examine them and what you should do to protect your interests and take control of your tax residency compliance.

The UK Budget introduced several pivotal changes for tax and residency rules. These included increasing Capital Gains Tax (CGT) and changing Inheritance Taxation (IHT) framework. It also moved forward with the previously set plans to scrap the non-dom regime. The UK Government is looking to replace it with a residency-based system.

Here are the critical details:

A 4-year FIG Regime

The introduction of a new 4-year foreign income and gains (FIG) regime will be available for new arrivals to the UK for their first four years of tax residency, provided they haven’t been UK tax residents in the 10 consecutive years before their arrival. The regime provides 100% relief on eligible FIG for those four years.

Furthermore:

• • From April 6 2025, all former remittance basis users ineligible for the 4-year FIG regime pay tax at the same rate as other UK residents on any newly arising FIG.

• • Former remittance basis users continue to pay tax on FIG, which arose before April 6, 2025, when they remit to the UK.

• • If someone leaves the UK temporarily during the 4-year FIG period, they can still claim the FIG relief when they return, as long as it’s within the 4-year timeframe.

For example, if an individual leaves the UK in years 2 and 3 and returns in year 4, they remain eligible for FIG relief in that fourth year. However, they can’t claim it in year 5 since it falls outside the initial 4-year period, which is only valid for up to 10 consecutive years.

Trusts

No Tax Protection: Non-domiciled individuals who don’t qualify for the 4-year FIG relief won’t be protected from tax on FIG within their trusts.

Protected Trusts: FIG from protected non-resident trusts won’t be taxed unless paid to UK residents who don’t qualify for the 4-year FIG relief.

Taxable Distributions: FIG from these trusts may be taxed on UK resident settlers or beneficiaries without 4-year FIG relief if matched to distributions they receive from the trust globally.

A Temporary Repatriation Facility (TRF)

The TRF allows individuals previously taxed under the remittance basis to bring in certain untaxed foreign income and gains (FIG) from before 2025 at a reduced tax rate over a three-year period:

• • 12% tax rate for the first two tax years.

• • 15% tax rate for the final tax year.

For individuals benefiting from offshore trusts, the TRF applies if they used the remittance basis and the funds are linked to pre-2025 gains within the trust. Those who pay TRF tax can choose to remit these funds later, beyond the TRF period.

Inheritance Tax

The UK is introducing a residency-based inheritance tax (IHT) system that affects how non-UK assets are taxed.

• • Residency Requirement: Non-UK assets will be subject to IHT if the individual has lived in the UK for at least 10 out of the last 20 tax years before the taxable event (like a death). However, if they lived in the UK for only 10–19 years, the period their assets stay subject to UK inheritance tax after they leave the UK will be shorter.

• • Asset Exclusion: Non-UK assets in trusts won’t automatically be excluded from IHT. Assets are only excluded when the person who placed them in the trust (the settlor) is not a long-term UK resident. If the settlor is a long-term resident, the assets will be subject to IHT.

Here are the key dates to understand:

Most experts predict these UK non-dom regime changes in 2025 will cause many people to reconsider their UK residency plans. In our recent Daysium Partner survey, over half of the advisors suggested that non-doms are highly likely to leave the UK. Many have already had these conversations with clients.

To prepare for the upcoming changes, it’s recommended to consider three vital steps:

1. Consult Your Tax Advisor

The UK non-dom regime changes in 2025 are comprehensive and warrant careful consideration. For HNWIs with complex financial situations, consulting a tax advisor is essential. Your tax advisor can help you understand the complexities of the new framework. Please visit our Partner page to connect with our network of trusted tax experts.

2. Review Your Domicile and Residency Status

The Autumn Budget has introduced updates that may impact your tax obligations, but individual circumstances vary. A tax advisor can guide you through the specifics of the Statutory Residence Test (SRT). They can also help determine if rules like the split-year treatment apply to your situation. Working with a tax advisor can bring clarity to your tax profile now and in the future.

3. Consider Alternative Tax Jurisdictions

For those evaluating alternative residency options, speaking with a tax advisor is essential. They can help you understand the tax structures and residency requirements in other countries. This can ensure your lifestyle and financial goals align. The decision to relocate can have significant tax implications. Thorough planning with expert guidance is critical for a smooth transition.

Whatever you decide to do, having accurate records of your time in the UK and abroad can prove invaluable. This is especially crucial in the event of a tax investigation.

Real-time day counts and supporting evidence, like travel logs and location data, can support your residency records. Reliable data not only gives you peace of mind but also strengthens your position if a review of your residency status is ever required.

Daysium can strengthen your strategic position. Our platform makes navigating the UK non-dom regime changes in 2025 and beyond easier.

The Benefits of Daysium

Our platform and companion app will:

• • Automate your day counting — Your day counts are calculated using GPS and movement data from your phone. This reduces error risks common with manual methods.

• • Precise and real-time day counts — Automation also guarantees your day counts are accurate. What’s more, you can view them in the palm of your hand. With this instant access to your residency information, you can make informed travel decisions anytime.

• • Secure digital evidence to back up your claims — Our companion app allows you to attach digital evidence to your day counts. Photos, boarding passes, and notes can strengthen your tax residency claims. All your data is safely stored with enterprise-grade encryption. This guarantees your records are protected and accessible whenever needed.

• • Personalised day counting — Unlike most day counting apps, ours is tailored to your needs and the laws that apply to you. The companion app adjusts according to the tax jurisdictions that matter to your circumstances. This ensures you stay compliant without worrying about intricate legal details.

• • Enhance Advisor Collaboration — Collaborate seamlessly with your tax advisor and minimise the risk of miscommunication. By keeping your advisor in the loop with precise data, Daysium ensures smooth, transparent interactions.

Proactive Compliance

By generating evidence and accurate day counts, Daysium empowers you to confidently manage travel without tax compliance concerns. With reliable data, you can address any questions from authorities, knowing your records are in order.

If the budget has proven one thing, situations can change. By generating evidence in the present, you can fortify your future. HMRC and other tax authorities can look at past records and launch an investigation within specific time limits. You might not consider changing your tax residency today, but you can’t be sure about the next five years. If you choose to relocate, you can be sure the authorities will have a look at your situation.

With Daysium, you will confidently state, “There’s nothing to see here, everything is in order” if the authorities ask questions.

The time is now to act and prepare for the UK non-dom regime changes in 2025. By staying proactive, you can mitigate unexpected tax obligations and keep your tax residency intact. Daysium offers a clear path and peace of mind in a complex compliance landscape.

Take control of your residency strategy today. Join the Daysium waitlist to stay prepared and confidently navigate the new regulations.