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Major Changes to the UK Non-Dom regime announced in the 2024 Autumn Budget

Key reforms coming into effect from April 2025 will introduce a new framework to transition the non-dom system to a residence-based tax model.

5 Nov 2024

Current Non-Dom Tax Regime

Under the existing UK tax rules, individuals who live in the UK but maintain their “permanent home” overseas may qualify for non-domiciled (non-dom) status and opt to be taxed on the remittance basis. This means they only pay tax on UK-sourced income and gains or foreign income brought into the UK. Foreign income and gains kept offshore are not taxed by the UK, and there are inheritance tax (IHT) benefits as well, since worldwide assets are generally excluded from UK IHT for non-doms.

Non-dom status can be retained for up to 14 out of 20 years, with charges applied after seven years, making it a particularly favourable regime by international standards.

Key Reforms Starting from 6 April 2025

The new framework, effective April 2025, will transition the non-dom system to a residence-based tax model. Under this regime, individuals newly arriving in the UK may receive 100% tax relief on foreign income and gains (“FIG Relief”) for the first four years of UK residency, provided they haven’t been UK tax residents at any time in the prior ten years.

To utilize FIG Relief, individuals will need to file a claim each year within their Self-Assessment for each qualifying year. This relief applies only to foreign income and gains earned within the four-year period and excludes foreign employment income, which may instead be eligible for Overseas Workday Relief (OWR).

Overseas Workday Relief (OWR)

OWR is available for earnings on days worked abroad, providing tax relief on offshore income. From April 2025, OWR will align with the FIG Relief period, extending to a maximum of four years. Relief will be capped at the lower of £300,000 or 30% of an individual’s total employment income. Eligible individuals can claim OWR through their Self-Assessment, and UK employers will need to operate PAYE only on earnings tied to work performed within the UK, with no HMRC approval required.

Transitional Measures

Capital Gains Tax Rebasing: Current and previous remittance basis users who do not qualify for FIG Relief may rebase the value of foreign assets held as of 5 April 2017 for any disposals occurring from 6 April 2025 onwards, subject to certain conditions.
Temporary Repatriation Facility (TRF): The TRF offers remittance basis users a chance to bring foreign income and gains earned prior to April 2025 into the UK at a reduced tax rate. This facility will be available for three years, starting in April 2025, with a 12% rate for the tax years 2025/26 and 2026/27 and a 15% rate for 2027/28.

Non-doms who cannot access FIG Relief due to UK residency within the last ten years will not qualify for transitional relief. This differs from earlier proposals to reduce foreign income tax by 50% for one year under the new rules.

Changes to Inheritance Tax (IHT)

From April 2025, the current domicile-based IHT framework will transition to a residence-based system.

The upcoming reforms represent a major shift in the UK tax framework, especially for non-doms who may need to rethink their financial and estate planning strategies.

英國「非本國居民」稅務制度重大變革：2024 年秋季預算後的變化

現行非本國居民稅務制度

在現行的英國稅務制度下，居住在英國但將「永久居所」設在海外的個人，可以選擇申請「非本國居民」（non-dom）身份，並按「匯入制」納稅。這意味著他們僅需對來自英國的收入和資本利得或匯回英國的海外收入繳稅，而未匯入的海外收入則無需在英國繳稅。此外，非本國居民還享有遺產稅（IHT）上的優惠，通常無需就全球資產繳納英國遺產稅。

非本國居民身份可使用最長為 20 年中的 14 年，七年後則會收取額外費用。以國際標準而言，該制度相對優惠。

自 2025 年 4 月 6 日起的主要變革

從 2025 年 4 月起，非本國居民制度將過渡為基於居住地的稅務模式。新制度下，首次來英國定居且過去十年內未在英國居住的個人，可能在前四年內享有 100% 的海外收入和資本利得（FIG）稅務減免。

若要申請 FIG 減免，個人需在每個符合條件的稅務年度內通過「自我評估」提交申請。該減免僅適用於四年內的海外收入和利得，而海外薪酬則不符合 FIG 減免資格，但可能符合「海外工作日減免」（OWR）。

海外工作日減免（OWR）

OWR 為非本國居民提供離岸收入的稅務減免，適用於在英國以外工作日的收入。自 2025 年 4 月起，OWR 將與 FIG 減免一致，最長可延至四年，並且以 £300,000 或個人總就業收入的 30% 為限，取其中較低者。符合條件的個人可通過「自我評估」申請 OWR，英國雇主僅需對員工在英國工作的收入執行 PAYE，不再需要 HMRC 的事先批准。

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