UK Non-Dom Remittance Basis: End of the Regime and What Comes Next 2026

The UK's non-domicile remittance basis tax regime -- which allowed individuals with a foreign domicile to pay UK tax only on income and gains they brought into the UK -- was abolished from 6 April 2025. This was one of the most significant changes to UK international tax in a generation. If you were previously claiming the remittance basis, or if you are a new arrival to the UK, understanding what has replaced it is essential for your 2026/27 tax planning.

What Was the Remittance Basis?

For many years, individuals who were resident in the UK but not domiciled here (non-doms) could elect to be taxed on the "remittance basis." Under this system:

• UK-source income and gains were taxed in the normal way
• Foreign income and gains were only taxed if remitted (brought) to the UK
• Foreign income and gains not remitted to the UK were not subject to UK tax, regardless of how much had accumulated

Those who had been resident in the UK for 7 or more of the previous 9 years faced an annual charge to use the remittance basis (the Remittance Basis Charge -- £30,000). For long-term residents, this rose to £60,000. These charges were in addition to tax on any remitted amounts.

After 15 years of UK residence, individuals became "deemed domiciled" and could no longer use the remittance basis.

The New FIG Regime

The Foreign Income and Gains (FIG) regime replaced the remittance basis from 6 April 2025. It is fundamentally different in design.

Who Qualifies

To access FIG relief, you must:

• Be an individual who was not UK tax resident in any of the 10 tax years immediately before your current period of UK residence
• Have become (or become) UK tax resident

This is a strict requirement. If you were UK resident in even one of the previous 10 years, you cannot access the FIG regime.

What FIG Provides

During the first 4 tax years of UK residence (counting from the first year of UK tax residence after the 10-year non-residence period), a qualifying individual:

• Pays no UK tax on foreign income and gains arising during those 4 years
• Does not need to pay the Remittance Basis Charge
• Can bring foreign income and gains into the UK freely -- there is no remittance restriction
• Does not need to designate or track which funds are "clean" capital versus income/gains

This last point is a significant simplification. Under the old remittance basis, meticulous bank account segregation was required to avoid accidentally remitting taxable income. Under FIG, there is no such restriction during the qualifying period.

The 4-Year Clock

The 4-year FIG period runs from the first UK resident tax year (after the 10-year absence). It does not reset if you leave and return, and it cannot be extended. Once 4 years of UK residence have elapsed, the individual moves onto the standard UK tax rules -- taxed on worldwide income and gains.

Example: Anna moves to the UK from Germany on 1 September 2025, having not been UK resident since 2012 (more than 10 years ago). She qualifies for FIG. Her 4-year period runs from 2025/26 to 2028/29. From 2029/30, she is taxed on worldwide income and gains.

Overseas Workday Relief

Overseas Workday Relief (OWR) continues in a revised form under the new regime. For the first 3 tax years of UK residence (within the FIG period), employees who perform duties outside the UK can claim relief on the proportion of their employment income attributable to overseas work days.

OWR is valuable for internationally mobile employees who work partly in the UK and partly overseas. The mechanics have been simplified compared to the previous regime -- you no longer need to keep foreign income in a segregated overseas account.

The Temporary Repatriation Facility

What Is the TRF?

The TRF is a transitional arrangement for individuals who previously used the remittance basis and have accumulated unremitted foreign income and gains from tax years up to and including 2024/25.

Under the TRF:

• Individuals can designate unremitted foreign income and gains from pre-April 2025 tax years
• A flat rate of 12% tax applies to designated amounts in 2025/26 and 2026/27
• Once designated and the 12% paid, the amounts can be brought to the UK freely
• No further tax arises on remittance of designated amounts

The TRF is entirely optional. If you do not use it, your pre-April 2025 unremitted income and gains are not immediately taxed -- they remain in a "pool" of potentially remittable amounts. But if you bring them to the UK after the TRF window closes (from 2027/28 onwards), they will be taxed at your full marginal rate.

Who Should Consider the TRF?

The TRF is most attractive for individuals who:

• Have large accumulated unremitted foreign income or gains
• Plan to bring funds to the UK in future years
• Have a marginal tax rate above 12% (which will apply to most higher and additional rate taxpayers)
• Want certainty and simplicity

For individuals with very small amounts of unremitted income, or those who intend to leave the UK permanently and never remit, the TRF may not be worth using.

Inheritance Tax and the End of Domicile

One area where the old framework partly survives is IHT.

Domicile Retained for IHT (for Now)

While the income tax and CGT rules have moved away from domicile, the concept of domicile has been retained for IHT -- at least initially. The April 2025 reforms did not immediately abolish domicile for IHT purposes. This means:

• Non-UK domiciled individuals who were not "deemed domiciled" before April 2025 may still have a non-UK situs estate that is outside UK IHT
• UK situs assets (including UK residential property held directly) remain within UK IHT regardless of domicile
• Individuals who became deemed domiciled (after 15 years of residence under the old rules) are subject to worldwide IHT

Long-Term IHT Reform

The government has signalled further IHT reform linked to the length of UK residence rather than domicile. Under proposals (not yet law at the time of writing), IHT would apply to worldwide assets after a certain number of years of UK residence, with a "tail" period after leaving the UK. Individuals planning their long-term position should monitor these developments closely.

UK Residential Property

Under the old rules, UK residential property held through offshore structures was within the scope of UK IHT (the "ATED" and residential property IHT rules). This remains the case. There is no shelter available for UK property through offshore structures.

Planning Considerations for 2026/27

New Arrivals

If you are moving to the UK for the first time (or after a 10-year absence), you should:

• Confirm your UK residence status under the Statutory Residence Test
• Verify your 10-year non-residence period carefully -- partial year residence can count
• Consider the timing of realising foreign gains -- ideally before UK residence begins or within the 4-year FIG window
• Set up appropriate banking arrangements (the FIG regime is simpler than remittance basis, but having separate accounts for foreign and UK income remains sensible)

Existing Non-Doms

If you were using the remittance basis before April 2025 and you are continuing to be UK resident:

• You are now taxed on worldwide income and gains in the standard way from 2025/26
• Assess whether to use the TRF for pre-April 2025 unremitted amounts -- the 12% rate closes after April 2027
• Review whether you have a FIG period available (if you had a period of 10 or more years of non-residence at some point before returning to the UK)
• Seek specialist tax advice on IHT exposure, particularly if you hold UK residential property or have been resident for many years

Leaving the UK

If you are considering leaving the UK, specialist advice is essential on:

• The IHT "tail" period (proposed changes may extend exposure after departure)
• CGT on disposals after leaving
• Whether TRF use before departure is advantageous

Frequently Asked Questions

When exactly was the remittance basis abolished? The remittance basis was abolished for tax years starting on or after 6 April 2025. The last tax year in which the remittance basis could be used was 2024/25 (ending 5 April 2025).

Can I still use the remittance basis in 2026/27? No. The remittance basis is not available for 2025/26 or any later tax year. If you were using it in 2024/25, you will be taxed on worldwide income and gains from 2025/26 onwards (unless you qualify for the FIG regime as a new arrival).

What if I was a non-dom for less than 4 years before April 2025? If you arrived in the UK less than 4 years before 6 April 2025, you may still have some of your FIG period remaining. For example, if you first became UK resident in 2023/24, you have the FIG regime available for 2023/24, 2024/25, 2025/26, and 2026/27 -- the full 4 years.

Do I need to pay anything to access the FIG regime? No. Unlike the remittance basis charge (which could cost £30,000 or £60,000 per year), there is no annual charge for the FIG regime. You simply claim the relief on your self assessment return.

What is the TRF tax rate? The Temporary Repatriation Facility rate is 12% for both 2025/26 and 2026/27. After 5 April 2027, you cannot use the TRF and any remittances of pre-April 2025 foreign income/gains will be taxed at your full marginal rate.

Can I bring money to the UK freely under the FIG regime? Yes. Unlike the remittance basis, there are no restrictions on bringing money to the UK under the FIG regime. Foreign income and gains within the 4-year FIG period can be remitted freely without triggering UK tax.

Does the FIG regime apply to dividends from foreign companies? Yes. All foreign income and gains are exempt from UK tax during the 4-year FIG period, including dividends, interest, rental income, and capital gains on foreign assets. Only UK-source income and gains are taxable as normal.

What is the Statutory Residence Test? The Statutory Residence Test (SRT) is the set of rules used to determine whether an individual is UK tax resident in a given year. It considers factors including the number of days spent in the UK, whether the individual has a home in the UK, and their work pattern. Getting the SRT analysis right is critical for FIG eligibility.

Are there any anti-avoidance rules around the FIG regime? Yes. HMRC has published anti-avoidance provisions to prevent manipulation of the regime -- for example, to prevent artificial arrangements designed to extend the 4-year period or to shelter income that would otherwise be UK-source. Genuine new arrivals working within the spirit of the rules should not be affected.

Should I get specialist tax advice on my non-dom status? Given the complexity of the changes and the significant amounts of money potentially involved, specialist international tax advice is strongly recommended for anyone affected by the transition from the remittance basis. The rules around the TRF, FIG eligibility, overseas workday relief, and IHT are all highly fact-specific.