Spring Budget 2024: End of the non-dom regime

The UK has always been a preferred onshore jurisdiction for high net-worth individuals, as the current regime allows individuals who are resident in the UK but not domiciled in the UK (“non-dom”) to opt in to being taxed on the remittance basis. In short, the remittance basis provides tax relief for non-dom individuals as foreign income and foreign gains are not subject to UK tax unless they are remitted (brought in) to the UK.

From 6 April 2025, this current regime is being abolished, and under the new regime, non-dom individuals who have not been resident in the UK for at least 10 years will have a 4-year period, where they will not pay UK tax on any foreign income and foreign gains (known as the “FIG” regime). Once those 4 years have lapsed, the individual will be taxed on the arising basis, meaning that they will pay UK tax on all worldwide income and gains in the same way as individuals who are resident and domiciled in the UK. Individuals who have been resident in the UK between 2015/2016 and 2021/2022 will be taxed on the arising basis after the 5 April 2025 if they remain resident in the UK.

The above changes have been proposed by the Conservative Party government; however, it is predicted that the Labour Party will win the upcoming general election, which is to be held before 6 April 2025. The Labour Party have also previously stated that they will abolish the current regime, so it is evident that the way non-dom individuals have previously been taxed is going to change significantly.

There are categories of individuals who will benefit under the new regime, for example individuals who have not been resident in the UK for at least 10 years and are planning on moving to reside in the UK permanently or for a period of 4-years or less and individuals with significant foreign income and gains who wish to remit them into the UK. Alternatively, there are categories of individuals who will not benefit, for example individuals who take advantage of the current tax reliefs, and we recommend all individuals who could be affected to seek professional legal advice.

To discuss your options, please contact us via the relevant office: London West End, Hampstead, Highgate, Crouch End or Clapham.
Private Client Team on DD: 020 7034 4217 or E: ajones@streathers.co.uk or E: chobbs@streathers.co.uk.

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