The UK government has announced sweeping changes to the taxation of non-domiciled individuals (non-doms), set to take effect from April 6, 2025. These reforms abolish the long-standing remittance basis and replace it with a new Foreign Income and Gains (FIG) regime, fundamentally altering how non-doms manage their wealth, investments, and tax liabilities.
For high-net-worth individuals (HNWIs), international investors, and business owners, these changes increase tax exposure, eliminate key advantages of offshore structures, and introduce new compliance requirements. However, there are short-term opportunities that investors can leverage before the reforms take full effect.
This detailed guide covers:
The key changes to the UK non-dom tax regime
How these changes impact investors and wealth structures
Opportunities and tax-efficient strategies to mitigate risks
Key Changes to the Non-Dom Regime (Effective April 2025)
1. End of Remittance Basis Taxation
For decades, the UK allowed non-doms to avoid UK tax on foreign income and gains as long as they remained offshore. Under the remittance basis, non-doms were only taxed when they brought funds into the UK.
What’s changing?
From April 2025, all UK tax residents—regardless of domicile status—will be taxed on worldwide income and gains.
Non-doms can no longer keep foreign income and gains offshore tax-free.
Any individual who has been UK tax resident for more than four years will be subject to full UK taxation on global earnings.
This shift eliminates a major tax planning advantage that many wealthy international investors have relied upon.
2. Introduction of the Four-Year FIG Regime
To ease the transition, the UK is introducing a four-year Foreign Income and Gains (FIG) regime.
How does it work?
Investors who have been non-UK residents for at least 10 consecutive years can qualify.
Once they move to the UK, they can benefit from a four-year exemption on foreign income and gains.
After four years, they will be taxed on worldwide income and gains, increasing their UK tax liabilities.
While this offers short-term tax relief, it forces non-doms to either restructure their holdings before the four-year period ends or consider alternative jurisdictions.
3. Removal of Trust Protections
Historically, offshore trusts allowed non-doms to protect foreign income and gains from UK taxation indefinitely. These “protected trusts” were a key wealth management tool for many international investors.
What’s changing?
From April 2025, UK tax resident settlors will be taxed on trust income and gains, even if they remain offshore.
UK beneficiaries of offshore trusts will now pay tax on distributions, eliminating tax-free roll-up benefits.
Offshore trusts will no longer shield assets from UK tax, making them significantly less effective as a tax planning tool.
Action required: Investors with offshore trusts should urgently review their structures to avoid unexpected tax liabilities.
4. New Temporary Repatriation Facility – A Limited-Time Opportunity
The UK is introducing a one-time opportunity for non-doms to bring untaxed foreign income and gains into the UK at a reduced tax rate.
How does it work?
12% tax if remitted between April 2025 and April 2027
15% tax if remitted between April 2027 and April 2028
For investors who have large offshore holdings, this presents a rare opportunity to bring funds into the UK at a much lower rate than the usual 45% top income tax rate.
5. Rebasing of Capital Gains Tax (CGT) for Foreign Assets
Non-doms who have previously claimed the remittance basis will be allowed to rebase their foreign assets to their April 2017 value.
Why is this important?
It allows investors to reduce taxable capital gains when selling foreign assets in the future.
This can lower overall CGT liabilities, making it a valuable tax planning opportunity.
However, this rebasing is not automatic—investors must actively claim it, making professional tax advice essential.
How These Changes Impact Investors
The abolition of the remittance basis and new global tax rules create both challenges and opportunities for non-dom investors.
1. Higher Tax Liabilities for Long-Term UK Non-Dom Investors
Investors who have been non-UK residents for at least 10 consecutive years can qualify.
Once they move to the UK, they can benefit from a four-year exemption on foreign income and gains.
After four years, they will be taxed on worldwide income and gains, increasing their UK tax liabilities.
2. End of Offshore Trust Tax Shelters
Trusts will no longer protect foreign assets from UK taxation.
Trust income and gains will be taxable on UK-resident settlors and beneficiaries, making offshore structures far less effective.
3. Wealth Restructuring Becomes Essential
Investors must review offshore asset structures to minimize exposure to new tax liabilities.
Strategies may include:
4. Increased Inheritance Tax (IHT) Exposure
The UK is shifting to a residence-based inheritance tax system.
Long-term UK residents will no longer be able to avoid IHT by claiming non-dom status.
Estate planning is now critical to prevent unnecessary tax liabilities on global wealth.
5. Opportunity to Bring Offshore Funds into the UK at a Lower Tax Rate
The Temporary Repatriation Facility provides a one-time opportunity to remit offshore funds at a 12-15% tax rate.
Investors should act quickly to take advantage of this limited-time relief.
What Investors Should Do Now
With just over a year before these changes take effect, investors must act now to restructure their holdings and protect their wealth.
Review Existing Tax and Investment Structures
Offshore trusts and companies may no longer provide the same tax advantages.
Reassess corporate and personal wealth structures to ensure compliance and efficiency.
Consider Utilizing the Four-Year FIG Window
If planning UK residency, timing your move strategically can provide four years of tax relief before full UK taxation applies.
Take Advantage of the Temporary Repatriation Facility
This rare opportunity allows non-doms to bring offshore funds into the UK at significantly lower tax rates (12-15% instead of 45%).
Optimize Investment Holdings for UK Taxation
Investors should realign portfolios to minimize CGT and inheritance tax exposure.
Capital gains rebasing offers a valuable opportunity to reduce tax burdens.
Explore Alternative Jurisdictions
Given the new tax landscape, some investors may benefit from relocation or alternative residency in more tax-efficient jurisdictions.
Cyprus, Portugal, and the UAE are popular choices for lower tax exposure and greater financial flexibility.
How Rich Estates Helps Investors Navigate These Changes
At Rich Estates, we help investors adapt to the new tax landscape, restructure their real estate portfolios, and explore alternative residency options to protect their wealth.
1. Real Estate Portfolio Restructuring
✔ Reorganizing UK property investments to minimize tax exposure.
✔ Sourcing high-value investment properties in Cyprus and other tax-friendly jurisdictions.
✔ Implementing strategies to mitigate CGT and IHT risks.
2. Relocation & Residency Planning
✔ Helping investors secure residency in Cyprus for tax efficiency.
✔ Managing UK residency timing to maximize the four-year FIG window.
✔ Assisting with legal, tax, and financial structuring for a seamless transition.
3. Business & Asset Structuring
✔ Setting up Cyprus-based businesses for lower tax rates.
✔ Repositioning offshore assets into more secure, compliant structures.
✔ Helping investors utilize the Temporary Repatriation Facility efficiently.
Final Thoughts – Act Now Before the April 2025 Deadline
The UK’s non-dom tax reforms will have a major financial impact on investors. Waiting too long could result in massive tax liabilities and lost opportunities.
Get in Touch with Rich Estates Today
If you need help restructuring your wealth, navigating UK tax changes, or exploring alternative jurisdictions, we’re here to guide you.
Let’s secure your financial future—before the window closes.
Your trusted partner for secure, high-yield property investments and seamless real estate management in the UK & Cyprus.
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