From 6 April 2025, the United Kingdom ended its centuries-old remittance-basis tax regime for non-domiciled residents. The political optics had become impossible to defend after a decade of news cycles about non-dom HNWs paying low tax on foreign income while staying in central London. The change is now law — and the question for anyone affected is no longer "will it happen" but "what should I actually do."
This guide walks through what the new regime is, who it benefits, who it punishes, and what the realistic alternatives look like for HNW individuals deciding between staying and leaving. It draws on the published HMRC guidance and the TaxAtlas country dataset; verify specifics with a UK-qualified tax advisor before acting.
What the old non-dom regime actually was
Until April 2025, a UK resident who could establish that their domicile — broadly, their permanent home in the legal sense — was outside the UK could elect for the remittance basis. Effect: foreign income and gains were not taxed in the UK unless and until they were remitted (brought into) the UK.
The election came with friction:
- Annual Remittance Basis Charge (RBC): £30,000 after 7 of the previous 9 years of UK residence; £60,000 after 12 of 14 years.
- Loss of personal allowance and capital gains tax annual exemption.
- Constant tracking of "clean capital" vs "tainted" foreign income to avoid inadvertent remittance.
- 15-year hard deemed-domicile rule (any 15 of last 20 tax years → treated as UK domiciled, regardless of election).
Still, for HNWs with material foreign-source income and a willingness to manage the bookkeeping, the regime was a defining feature of London as a wealth jurisdiction.
What replaced it from April 2025
The remittance basis is gone. In its place is a tightly-bounded 4-year regime, plus transitional relief for incumbents:
The new 4-year Foreign Income and Gains (FIG) regime
New arrivals to the UK who have been non-resident for the prior 10 consecutive tax years get a full exemption from UK tax on foreign income and gains for their first 4 years of UK residence. No remittance basis charge. The exemption is automatic (with elections to nominate).
Key constraints:
- The 10-year non-residence test is strict — even a single qualifying year of UK residence breaks it.
- After year 4, the individual moves to standard worldwide UK taxation on all foreign income and gains.
- The relief does not extend to UK-source income or to existing UK-resident individuals — it's strictly for new arrivals.
Transitional relief for existing non-doms
Existing non-doms get a series of relief mechanisms to manage the cliff edge:
- Temporary Repatriation Facility (TRF): 2025–2028 window allowing pre-6-April-2025 foreign income and gains to be remitted to the UK at a reduced rate (12% in 2025/26 and 2026/27, 15% in 2027/28) instead of the normal up-to-45% on income or 28% on gains. This is the most-discussed transitional measure.
- Rebasing election: non-doms who used the remittance basis in any prior year may elect to rebase personally-held foreign assets to their 5 April 2017 value for CGT purposes on disposals after April 2025.
- 50% reduction on foreign income for 2025/26 only — partial soft landing in the first year of the new regime.
None of these transitional measures restore the old remittance basis. They simply reduce the immediate hit. For long-term planning, the only question is whether to stay in UK-resident worldwide-tax mode (with FIG if eligible) or leave.
The trust hit (often overlooked)
Offshore trusts were the parallel structure to the personal non-dom regime — and the trust changes are arguably more disruptive.
Before April 2025, foreign trusts settled by non-doms could shelter foreign income and gains from UK tax indefinitely for UK-resident beneficiaries, subject to specific anti-avoidance rules. Distributions could often be matched against "clean" pool components.
From April 2025, the protected-status regime for non-resident trusts is largely abolished. Foreign income and gains arising in such trusts are now taxable on settlors who are UK resident (no longer protected by their non-dom status), and the matching mechanics for distributions to beneficiaries are tightened. There are transitional measures, but the planning landscape for HNW family trust structures has fundamentally changed.
Anyone with a meaningful offshore trust structure needs a specialist review in 2025/26 — this is one of the highest-stakes areas of the reform.
The inheritance tax change
Equally significant: the long-standing distinction between "UK domiciled" and "non-UK domiciled" individuals for inheritance tax (IHT) purposes is being replaced with a residence-based test.
Under the new rules, long-term UK residents (broadly, 10 of the previous 20 tax years) are within the scope of UK IHT on worldwide assets. Conversely, individuals who leave the UK after long residence remain within scope for up to 10 years after departure (a "tail" period that gradually decays).
IHT applies at 40% above the £325,000 nil-rate band on transfers on death and certain lifetime gifts. For HNWs whose worldwide net worth is the issue (not just liquid income), this is the more meaningful change than the income/gains shift.
Who actually benefits from the new regime
The 4-year FIG regime is generous for the narrow population it targets:
- Inbound founders and executives who haven't been UK-resident in the past 10 years and have material foreign income/gains during their first 4 years. The exemption is automatic — no RBC, no complex elections, no clean-capital tracking.
- Returners after long absence who meet the 10-year non-residence test. A Briton who left in 2010 and returns in 2026 gets 4 clean years before standard rules apply.
- Time-bounded UK assignees on a 2–4 year assignment from a foreign multinational, where foreign-source compensation deferrals or carried-interest realisations land during the window.
The regime is much less helpful (or actively unhelpful) for:
- Existing long-term non-doms with permanent foreign-income streams (now fully taxed after the transitional period).
- HNWs whose primary wealth driver is foreign capital gains realised over time horizons longer than 4 years.
- Settlors of substantial offshore trust structures.
- Anyone optimising for IHT exposure on worldwide assets.
The realistic alternatives
For non-doms whose post-2025 UK tax bill is materially larger and whose lifestyle allows it, several jurisdictions now compete more aggressively for the wealth they used to attract. Each has a different shape.
Italy (€200k flat tax)
Italy's special tax regime for new HNW residents has been the largest beneficiary of UK non-dom abolition. From 11 August 2024 the regime fee doubled from €100,000 to €200,000 per year on all foreign income, irrespective of amount. Pre-existing electors stay at €100,000. Foreign-source income is otherwise exempt; only Italian-source income is taxed at regular rates. See the TaxAtlas Italy page for the broader rate structure.
Practical mechanics: residency requires actual presence in Italy. The €200,000 fee is a flat substitute, not a credit-or-deduction system. Family members can be added at €25,000 each. The regime is good for 15 years from election. Italy has a sophisticated tax treaty network and excellent quality of life — major reason the regime has won market share.
Best fit: HNWs with €2M+ annual foreign income where the flat fee is a meaningful saving on what UK worldwide-basis tax would otherwise be. Below that threshold the math is less obvious.
Portugal (NHR 2.0 / IFICI — narrow)
Portugal's original NHR ended for new applicants at end of 2023 (with transitional acceptance through March 2025). The replacement IFICI regime is narrower: 20% flat on Portuguese-source income from qualifying scientific, technology and innovation roles, with foreign income generally exempt. Most HNW non-doms won't qualify. The TaxAtlas Portugal page tracks this.
Best fit: qualifying knowledge workers, founders in eligible sectors, retirees with US pension income (treaty-favourable). Less compelling for pure investment-income HNWs than it was pre-2024.
United Arab Emirates
0% personal income tax, no CGT, 9% corporate tax (Pillar Two top-up for large MNEs). Tax residency requires 183 days plus a tax residence certificate. The Golden Visa program offers 10-year residency for HNW investors. The TaxAtlas UAE page has the full rate set.
Best fit: HNWs comfortable with the UAE lifestyle and able to commit to 183+ days. Practical friction is lowest for those who already have business connections in the region. Banking is excellent. No language barrier in Dubai. The Italian regime is generally a better choice for those who'd otherwise prefer a European base.
Cyprus (non-domiciled regime)
Cyprus is the closest spiritual successor to the old UK non-dom system: a non-domiciled resident of Cyprus pays 0% on dividends and interest from foreign sources for the first 17 years (Special Defence Contribution exemption). Personal income tax applies normally to other income, but residency requires only 60 days under the alternative test (versus 183 in most jurisdictions). The TaxAtlas Cyprus page has rate details.
Best fit: HNWs whose foreign income is largely dividends and interest, who can spend 60–183 days in Cyprus. The 60-day rule requires no other tax residence elsewhere, so it doesn't combine easily with split-residence arrangements.
Malta (non-domiciled, remittance-based)
Malta's non-dom regime still uses remittance-basis taxation: foreign income only taxed when remitted to Malta. Permanent residency through Malta Permanent Residence Programme. EU membership is the structural advantage over UAE/Cyprus for many. The TaxAtlas Malta page has the schedule.
Best fit: HNWs valuing EU access, comfortable with the relatively small island lifestyle. Banking has historically been more bureaucratic than Cyprus/UK but workable.
Monaco
0% personal income tax (except French citizens), no CGT, no wealth tax, no inheritance tax between spouses and direct line. Practical minimum requirements: €500,000+ bank deposit, proof of accommodation, residence permit, and meaningful commitment. The TaxAtlas Monaco page has details.
Best fit: HNWs at the top tail of the wealth distribution where the cost of living is rounding error. Limited supply of accommodation makes practical entry slow.
Switzerland (lump-sum taxation / Pauschalbesteuerung)
Switzerland offers a forfait (lump-sum) tax regime in many cantons for HNW foreigners who do not work in Switzerland: tax computed on imputed living expenses (typically 7x annual rental value or CHF 400,000 minimum), not on actual worldwide income. Federal lump-sum minimum is CHF 250,000 income for federal purposes. Quality of life and banking are excellent.
Best fit: HNWs who can commit to a Swiss residence, have a meaningful income base, and benefit from a predictable annual figure rather than a percentage of variable income.
The stay-or-go decision framework
For most non-doms, the decision pivots on a few variables:
1. How much of your income is genuinely foreign-source and ongoing?
If most of your annual income is UK-source employment, partnership distributions, or dividends from a UK private company, the non-dom regime change matters less. You were already paying UK tax on most of it. The marginal cost of the regime change is the foreign portion now becoming taxable.
If most of your income is foreign-source dividends, interest, carried interest, or rental income from foreign property, the change is more material — that portion now becomes UK-taxable after the 4-year FIG window (or the transitional period if you're an incumbent).
2. How realistic is leaving?
The IHT 10-year tail means that leaving the UK doesn't immediately exit you from UK IHT scope. And residence-test rules make it genuinely difficult to be tax-neutral while travelling — you need to establish residence somewhere, not just stop being UK-resident. Italy and UAE are the most operationally realistic destinations for those who decide to leave for tax reasons.
3. What's your time horizon?
The 4-year FIG window means new arrivals get a window of relief. For someone planning to be in the UK for ≤4 years anyway (an inbound executive on assignment), the regime is generous. For someone planning to be in the UK indefinitely, the regime saves nothing after year 4.
4. Are you a trust settlor?
This is the most under-discussed factor. Settlors of long-standing offshore trusts face the largest planning challenge under the new rules — the trust regime is harder to optimise than the personal regime. Specialist trust advice is essential before acting.
Practical 2026 timeline for someone considering leaving
Q1 2026
- Engage UK tax specialist for current-state assessment. Quantify the post-FIG tax cost if you stay.
- Engage tax advisor in the candidate destination jurisdiction (Italy, UAE, Cyprus). Validate eligibility under the local regime.
- Review trust structures with specialist trust counsel. Decide on restructuring before tax year-end where helpful.
Q2–Q3 2026
- Apply for destination residency permit (Italian elective residence, UAE Golden Visa, Cyprus non-dom registration).
- Move primary residence and key personal documentation. Update banking to non-UK-resident status where appropriate.
- Plan UK departure formalities: P85 form, NRL1 for any UK property income, deregister from UK voter roll if applicable.
Q4 2026
- Establish bona fide residence in destination — physical presence, lease/own accommodation, register with local utilities and tax authority.
- Apply for tax residence certificate where needed (for treaty benefits and onward planning).
- File partial-year UK self-assessment with departure date documentation.
2027+
- Monitor IHT 10-year tail exposure. Plan around the tail's gradual decay.
- If retaining UK property or business interests, register for non-resident landlord scheme and consider entity-level changes.
- Review the picture annually as both UK and destination regimes evolve.
What if you decide to stay
Staying is the right call for many. The transitional measures (TRF, rebasing, 50% reduction in 2025/26) materially reduce the first few years' hit. After that, the new regime is broadly similar to standard worldwide UK taxation that the rest of the population has always faced. London's non-tax advantages — legal system, time zone, language, talent, banking, schools — remain intact.
If staying, the planning shifts from "shield foreign income from UK tax" to standard worldwide-tax-resident planning: ISA / pension maximisation, careful capital gains timing, gift-and-trust use of the £325,000 nil-rate band, and treaty planning for any retained foreign assets.
FAQ
When exactly did the UK abolish the non-dom regime?
The new rules took effect from 6 April 2025, the start of the 2025/26 UK tax year. The remittance basis as a continuing regime ended for new years from that date, with transitional relief running through April 2028.
Does the 4-year FIG regime work for British citizens?
Yes — citizenship is not relevant. The test is whether you have been non-resident for the past 10 consecutive tax years. A British citizen who has lived abroad for 10+ years and returns to the UK qualifies for the 4-year FIG exemption on the same terms as a foreign national.
What is the Temporary Repatriation Facility?
A 3-year window (2025/26 through 2027/28) allowing former non-doms to remit pre-April-2025 foreign income and gains into the UK at a reduced rate: 12% in 2025/26 and 2026/27, 15% in 2027/28. After the window closes, normal income tax rates (up to 45%) apply to such remittances.
If I leave the UK, when does UK IHT stop applying to me?
The new residence-based IHT regime applies a 10-year "tail" for individuals who have been UK-resident for 10 of the previous 20 tax years. The exact mechanics taper over the tail, so departure timing within a tax year and the run-up to the threshold matter. Specialist IHT planning is essential.
Is Italy or UAE the better post-UK destination?
Depends on lifestyle and income profile. Italy's €200k flat tax works for HNWs with high ongoing foreign income who want a European base, EU access, and good infrastructure. UAE works for those willing to commit to 183+ days in Dubai/Abu Dhabi, with no European-base requirement. Italy has 15-year regime certainty; UAE policy is more recent and could evolve.
Can I keep my UK property as a non-resident?
Yes. UK property income remains UK-taxable regardless of your residency. Non-resident landlords register under the NRL scheme. Capital gains on UK residential property remain within UK CGT scope for non-residents. UK property continues to count toward UK IHT scope.
What about my UK ISA and pensions if I move abroad?
ISAs lose UK tax advantages when you become non-resident — you can't subscribe new amounts, and any growth/distributions may be taxable in the new country. Pensions are complex; some destination treaties (e.g., Italy) exempt UK pensions from local tax, but the picture varies. Plan around this before moving.
Should I move my offshore trust assets to a personally-held structure?
Not without specialist trust advice. The protected-status regime for non-resident trusts ended in April 2025, but the transition mechanics, settlor charging rules, and distribution matching rules are interrelated and intricate. Decisions here have multi-year tax consequences — this is the single highest-stakes area of the reform.
Next steps
If you're working through the stay-or-go decision, the TaxAtlas 2026 cheat sheet shows side-by-side rates for all 46 jurisdictions, including the alternatives discussed above. The find-your-jurisdiction quiz ranks options based on your situation.
For situation-specific guidance — trust restructuring, IHT 10-year-tail planning, FIG eligibility analysis, comparative cost modelling between Italy and UAE — request a response and TaxAtlas will point to relevant research or refer to a specialist who handles UK non-dom transition work.
This is research, not tax or legal advice. The non-dom transition rules are intricate, individual situations vary, and the cost of getting it wrong is high. Always verify with a UK-qualified tax advisor — and a specialist in your destination jurisdiction if leaving — before acting.