Do Non-Doms Pay Tax on Foreign Income? (2025 Rules)

The old “non-dom” regime was abolished from 6 April 2025. It’s been replaced by a residence-based system. New arrivals to the UK (people not UK resident in any of the previous 10 tax years) get a 4-year exemption on foreign income and gains under the new Foreign Income and Gains (FIG) regime. After 4 years, foreign income and gains are taxed on the arising basis like UK income. The remittance basis no longer applies to new claims from April 2025.

This is the new framework, what it changed, and who’s affected for the 2026/27 tax year.

What was the old non-dom regime?

Under the old rules (in place until 5 April 2025), UK residents who were not UK domiciled could elect to use the remittance basis:

• They paid UK tax on UK income and gains as normal.
• Foreign income and gains were only taxed in the UK if remitted to the UK (brought into the country or used in the UK).
• An annual charge applied after several years on the remittance basis: £30,000 (7 of 9 years), £60,000 (12 of 14 years).
• Long-term residents (over 15 of 20 years) were deemed UK domiciled and lost the remittance basis.

The system meant that wealthy foreign-domiciled individuals could keep foreign wealth abroad indefinitely, paying UK tax only on what they brought to the UK. It generated significant political pressure as a perceived loophole, and successive governments tightened it.

What changed from April 2025?

The Spring Budget 2024 announced abolition of the non-dom regime. The 2024 Autumn Budget confirmed the replacement framework. From 6 April 2025:

1. The remittance basis is no longer available for new claims. Existing claimants are subject to transitional rules.
2. A new 4-year Foreign Income and Gains (FIG) regime applies to new UK residents who weren’t UK resident in any of the previous 10 tax years.
3. All other UK residents (including those who’ve been in the UK for years) are taxed on worldwide income and gains on the arising basis, regardless of domicile.
4. Inheritance Tax moved to a residence-based test as well, replacing the domicile-based system. [VERIFY: confirm exact IHT residence test rules with HMRC.]

The detailed rules are at HMRC: changes to non-UK domiciled individuals.

How the new 4-year FIG regime works

The replacement regime applies to qualifying new residents:

• You must have been non-UK resident for all of the 10 tax years before becoming UK resident.
• The exemption lasts for the first 4 tax years of UK residence.
• During those 4 years, you can claim that foreign income and gains are exempt from UK tax.
• You can still bring the funds to the UK during the 4-year period without triggering tax (unlike the old remittance basis).
• UK income and gains are taxed normally throughout.

After 4 years, full worldwide UK taxation begins — the same rules that apply to long-term UK residents.

You must claim the FIG regime via your Self Assessment return for each tax year you want it to apply. It’s an election, not automatic.

Who qualifies for the FIG regime?

Qualifying applicants in 2026/27:

• New arrivals who were not UK resident in any of 2015/16 through 2024/25.
• Returners who left the UK before 2015/16 and have just become UK resident again.
• Includes visa holders, foreign nationals, returning UK citizens — eligibility is residence-based, not nationality-based.

Excluded:

• Anyone who was UK resident in any of the last 10 years.
• Individuals who became UK resident before 6 April 2025 — they may benefit from separate transitional reliefs but not the new FIG regime per se.

Transitional reliefs for old non-doms

People who claimed the remittance basis before 5 April 2025 have access to transitional reliefs:

1. Temporary Repatriation Facility (TRF) — for a limited period (typically the first 3 tax years from 2026/27), former remittance-basis users can bring previously-unremitted foreign income and gains to the UK at a reduced tax rate (12% for the first two years, 15% for year three). [VERIFY: exact TRF percentages with HMRC.]
2. Capital gains rebasing — assets held on 5 April 2017 by former remittance-basis users can be rebased to that date’s market value for UK CGT purposes.
3. 50% reduction in foreign income for one tax year (2026/27) for former remittance-basis users transitioning to the arising basis.

These transitional reliefs are complex and time-limited. Anyone affected should get specialist tax advice well before each deadline.

What this means for newly-arrived UK residents

If you’ve just become UK resident and weren’t resident in any of the previous 10 years, the FIG regime can be very valuable:

• Year 1: claim FIG. Foreign salary, rental, investment income — all exempt from UK tax.
• Year 2–4: continue claiming FIG. Same treatment.
• Year 5 onward: foreign income and gains taxed under arising basis.

A common planning point: realise foreign gains before year 5. If you have a foreign investment portfolio with significant unrealised gains, selling during the FIG period can lock in the exemption. From year 5, any further gains are taxable in the UK.

But — once you claim FIG, you generally need to claim it consistently. Mixed claims can be complex and HMRC scrutinises the position.

What about UK income?

UK income is always taxed in the UK, FIG regime or not. So:

• UK employment salary — fully taxable on the arising basis.
• UK rental income — fully taxable.
• UK dividends, interest, capital gains — fully taxable.

Only foreign income and gains benefit from FIG.

Worked example: tech executive moving from Singapore in 2026/27

Vivek moves to the UK from Singapore on 1 May 2025, having lived in Singapore for 12 years. His position:

• Status: not UK resident in any of 2015/16 through 2024/25 (he was in Singapore). Qualifies for FIG.
• UK income 2026/27: £180,000 salary at UK employer.
• Singapore investment portfolio: SGD 2,000,000, generating SGD 60,000 of dividends in the year.
• Singapore investment portfolio gain: SGD 100,000 of unrealised capital gain.

His tax position:

• UK salary £180,000: taxed under PAYE. After personal allowance taper (he’s above £100k), tax of roughly £62,000. Plus NI ~£8,000.
• Singapore dividends: claim FIG. UK tax: £0. Singapore tax under Singapore rules.
• Realised gain in Singapore: if he sells the portfolio during the 4-year FIG period, UK tax: £0. Singapore tax may apply.
• Returns home to live abroad after 4 years: post-FIG, future foreign income would be UK-taxable on arising basis. He may plan an exit before year 5 if his career allows.

Without FIG, his Singapore dividends and gains would have added significant UK tax to his bill. The FIG regime makes the UK relocation materially more attractive for the first 4 years.

What about Inheritance Tax?

IHT moved from a domicile-based test to a residence-based test from April 2025. Key features (subject to verification of final detail):

• Long-term UK residents (10+ years of UK residence) become subject to UK IHT on worldwide assets.
• The trust IHT rules were updated to align with the new residence framework.
• Excluded property trusts set up before April 2025 retain some protection for assets that were foreign-situs and the settlor was non-dom at the time.

The IHT changes are some of the most complex transitional rules in the reform. Specialist estate-planning advice is essential for anyone with substantial wealth and a non-dom history.

[VERIFY: confirm IHT residence-test rules with HMRC and a qualified UK tax adviser.]

Internal links

• Do I pay tax on money sent from abroad to the UK?
• How to file a self assessment tax return for the first time
• What is the personal allowance and how does it work?

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This guide is information, not regulated financial advice. The post-April-2025 non-dom rules are technical, transitional and subject to ongoing HMRC guidance — speak to a qualified UK tax adviser before relying on a specific position.