Non-Dom Tax Changes 2026 — What It Means for You

What Is Changing?

For decades, the United Kingdom's non-domicile (“non-dom”) tax regime has been one of the most attractive features of the UK tax system for internationally mobile individuals. Under the remittance basis, non-doms could live in the UK and only pay UK tax on their foreign income and gains if and when those funds were brought (“remitted”) into the country. Foreign wealth that remained overseas was effectively outside the UK tax net.

That regime is now ending. Following the announcement in the Autumn Budget 2024, the government confirmed the abolition of the remittance basis from 6 April 2025. In its place comes a new system based on residence rather than domicile. The concept of domicile will no longer determine how your foreign income and gains are taxed in the UK.

This is the most fundamental change to UK international personal tax in modern history. Whether you are a long-standing non-dom, a recent arrival, or someone considering moving to the UK, the implications are significant.

The New Foreign Income and Gains (FIG) Regime

The replacement for the remittance basis is the Foreign Income and Gains (FIG) regime. Under FIG, new arrivals to the UK who have not been UK tax resident in any of the previous ten tax years will benefit from a four-year exemption on their foreign income and gains. During this four-year period, qualifying individuals will pay no UK tax on foreign income and gains, regardless of whether those funds are remitted to the UK.

This is, in some respects, more generous than the old remittance basis for the first four years — because there is no need to keep foreign funds offshore. You can bring money into the UK freely during the exemption period without triggering a tax charge.

After the four-year window closes, individuals become fully taxable on their worldwide income and gains, just like any UK-domiciled person. There is no extension, no annual charge to preserve a favourable regime, and no ongoing distinction based on domicile status. The transition from sheltered to fully taxed happens automatically at the end of year four.

Transitional Arrangements: The Temporary Repatriation Facility

The government recognised that abolishing the remittance basis overnight would create a harsh cliff-edge for existing non-doms who have accumulated substantial foreign income and gains under the old rules. To ease the transition, it introduced the Temporary Repatriation Facility (TRF).

The TRF allows individuals who previously claimed the remittance basis to bring historic unremitted foreign income and gains (those arising before 6 April 2025) into the UK at a flat reduced tax rate of 12%. This reduced rate applies during the three tax years from 2025/26 through 2027/28.

To put this in context: under the old regime, remitting these funds would have been taxed at your marginal rate — 45% for additional-rate taxpayers on income, and 20% or 24% on capital gains. The TRF rate of 12% represents a substantial saving for anyone with significant unremitted funds.

Impact on Inheritance Tax

Under the old rules, non-doms were only subject to UK inheritance tax on their UK-situated assets. Foreign assets — including overseas property, bank accounts, and investments — were completely outside the scope of UK IHT. For many wealthy non-doms, this was one of the most valuable aspects of their tax status.

The new regime moves IHT to a residence-based system. Individuals who have been UK tax resident for 10 of the previous 20 tax years will become subject to IHT on their worldwide assets, regardless of domicile. There is also a “tail” provision: after leaving the UK, you remain within the scope of UK IHT for a period that depends on how long you were resident (between 3 and 10 years after departure).

For long-term UK-resident non-doms, this is a fundamental change. Estates that were previously largely or entirely outside UK IHT may now face a 40% charge on worldwide assets. The planning implications are significant, and early action is essential.

Read our guide to inheritance tax planning →

Impact on Trusts

Many non-doms have used offshore trusts to hold foreign assets, benefiting from “protected trust” status which shielded trust income and gains from UK tax even when remitted to the UK. The government is reviewing the treatment of these structures under the new regime.

While the detailed rules are still being finalised, the direction of travel is clear: the favourable treatment of offshore trusts established by non-doms is being curtailed. Protected trust status is expected to be significantly limited, and distributions from such trusts to UK residents are likely to become taxable.

If you are a beneficiary of or settlor of an offshore trust, a comprehensive review of the structure is now essential. Depending on the trust's terms, assets, and the tax residence of beneficiaries, restructuring may be beneficial — but this must be done carefully and with specialist advice.

What Existing Non-Doms Should Do Now

If you are currently or were previously a non-dom taxpayer in the UK, there are several steps you should be taking now:

• Review your structures. Examine every offshore company, trust, and bank account. Understand how each will be treated under the new regime and whether any restructuring is beneficial.
• Quantify your unremitted income and gains. Calculate the total amount of pre-April 2025 foreign income and gains that have not been remitted to the UK. This determines the potential benefit of the Temporary Repatriation Facility.
• Evaluate the TRF. A 12% tax rate on historic foreign income and gains is significantly lower than marginal rates. If you need access to these funds — or expect to need access in the future — paying 12% now may be preferable to paying 45% later.
• Reassess your IHT exposure. If you have been UK-resident for 10 or more of the last 20 years, your worldwide estate is now potentially within the scope of UK IHT. Consider whether lifetime gifts, trust restructuring, or insurance could mitigate this.
• Consider your residence position. For some non-doms, leaving the UK may be the most effective response to these changes. The Statutory Residence Test determines UK tax residence, and careful planning around departure dates and tie-breaker provisions is critical.
• Take specialist advice. These changes are complex and the interactions between income tax, CGT, and IHT under the new regime create both risks and opportunities. Generic advice is not sufficient — you need an advisor who specialises in international personal tax.

Planning Opportunities in the Transition Period

While the abolition of the non-dom regime is clearly a negative development for those who benefited from it, the transitional provisions do create genuine planning opportunities:

• TRF repatriation: Bringing historic foreign income and gains into the UK at 12% could provide substantial liquidity — for investment, property purchase, or meeting other UK financial obligations — at a fraction of the tax cost that would apply from April 2028 onwards.
• Rebasing of foreign assets: The government has introduced a rebasing provision that allows non-doms to rebase the value of their foreign assets to their market value as at 5 April 2017 for CGT purposes. This can significantly reduce future capital gains tax on disposals of long-held foreign assets.
• Pre-arrival planning for new entrants: For individuals moving to the UK for the first time, the 4-year FIG exemption is generous. Structuring income and gains to maximise this window — for example, timing asset disposals to fall within the exemption period — can produce significant tax savings.

Read our guide to the remittance basis and its replacement →

Timeline of Key Dates