UK Non-Dom Regime Abolition: A Complete Guide for 2026/27
From 6 April 2025 the UK abolished the centuries-old remittance basis for non-domiciled residents, replacing domicile with residence as the key test for UK tax on foreign income and gains. This guide explains the new FIG regime, the Temporary Repatriation Facility, and what long-term residents and former non-doms need to check.
For decades, UK-resident individuals who were not UK-domiciled could elect the "remittance basis", meaning foreign income and gains were only taxed in the UK if and when brought ("remitted") into the country. From 6 April 2025 this basis was abolished entirely. Domicile — a common-law concept tied to where you consider your permanent home to be — no longer determines your UK income and gains tax treatment. In its place is a residence-based system, where how long you have been UK tax resident, not your domicile, decides whether foreign income and gains are taxed.
The New FIG Regime
New arrivals to the UK can benefit from the Foreign Income and Gains (FIG) regime for a limited number of years at the start of their UK residence, provided they were non-UK resident for a sufficient number of years beforehand. During this window, qualifying foreign income and gains can be brought into and used within the UK without triggering the additional UK tax charge that would otherwise apply, and — unlike the old remittance basis — the FIG regime does not require paying an annual charge to access it. Once the qualifying period ends, worldwide income and gains become taxable in the UK on the normal arising basis, the same as for any other UK resident.
Temporary Repatriation Facility
For people who used the remittance basis before the reform, historic unremitted foreign income and gains built up under the old rules can be brought into the UK during a time-limited window at a reduced, flat tax rate through the Temporary Repatriation Facility (TRF), rather than facing the higher marginal tax rates that would otherwise apply on remittance. Using the TRF generally requires an active claim and careful tracing of which funds qualify, particularly where money has been mixed with other income in an offshore account, so professional advice is strongly recommended before relying on it.
Inheritance Tax Impact
Inheritance Tax exposure also moved from a domicile-based test toward a residence-based "long-term resident" test. Once an individual has been UK tax resident for the qualifying number of years, they become exposed to UK Inheritance Tax on worldwide assets, not just UK assets, regardless of domicile — and this exposure can persist for a period even after they leave the UK, under a "tail" provision designed to prevent last-minute departures purely to avoid IHT.
Offshore Trusts
The reform also narrowed the long-standing protections that shielded income and gains inside offshore trusts settled by non-doms from UK tax on the settlor or beneficiaries. UK-resident settlors and beneficiaries of existing offshore trust structures can now face UK tax exposure that was previously deferred or excluded, meaning trusts set up under the old regime need a full review with a specialist private client adviser rather than being assumed to still work as originally designed.
Who Is Most Affected
Former remittance-basis users with substantial unremitted historic offshore income or gains
Long-term UK residents who previously relied on non-domiciled status, now facing worldwide taxation once their FIG window (if any) has expired
Settlors and beneficiaries of offshore trusts set up under the old protections
New arrivals to the UK who may still benefit from the time-limited FIG regime if they plan carefully around it
The old remittance basis, which let UK-resident non-domiciled individuals avoid UK tax on foreign income and gains they kept outside the UK, was abolished. It was replaced by a new residence-based regime built around a limited-duration Foreign Income and Gains (FIG) exemption for new arrivals, rather than domicile status, which no longer determines your UK tax treatment for income and gains.
What is the new FIG regime?
The FIG (Foreign Income and Gains) regime gives new UK tax residents a time-limited period — broadly their first four years of UK tax residence after a sufficient period of prior non-residence — during which qualifying foreign income and gains can be brought into the UK and used freely without an additional UK tax charge, provided they are properly claimed. After that window closes, worldwide income and gains are generally taxed on the normal arising basis, like any other UK resident.
Do I still need to think about domicile for anything?
Domicile as a general legal concept still exists and can matter for some purposes, but it no longer determines the remittance basis, because that basis has been abolished for income and gains. Domicile-based Inheritance Tax rules were also overhauled, with UK Inheritance Tax exposure moving toward a residence-based test rather than a domicile-based one, so long-term UK residents can become liable to IHT on worldwide assets even without ever becoming UK domiciled in the traditional sense.
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What is the Temporary Repatriation Facility (TRF)?
The TRF is a transitional measure allowing individuals who previously used the remittance basis to bring historic, pre-6 April 2025 foreign income and gains into the UK at a reduced, flat rate of tax for a limited window, rather than facing full marginal rates. It is designed to encourage money that was kept offshore under the old rules to be remitted and used in the UK without the harsh cliff-edge tax cost that would otherwise apply.
Does the TRF apply automatically?
No — using the TRF generally requires an active claim and careful identification of which funds are pre-6 April 2025 foreign income and gains that qualify, since mixed funds and historic offshore structures can make this complex. Professional advice is strongly recommended before relying on the TRF for any significant sum, given the record-keeping and mixed-fund tracing involved.
What happened to Overseas Workday Relief?
Overseas Workday Relief (OWR), which reduces UK tax on the portion of employment income relating to duties performed abroad, was retained in a modified form alongside the new regime rather than abolished, though its conditions and interaction with the new residence-based system changed. Anyone relying on OWR should check the current qualifying conditions rather than assuming the pre-2025 rules still apply unchanged.
How does this affect offshore trusts set up by former non-doms?
The old protections that shielded income and gains within offshore trusts settled by non-doms from UK tax were significantly narrowed as part of the reform, meaning settlors and beneficiaries who are UK resident for tax purposes can face UK tax on trust income and gains in a way that was previously deferred or excluded. Existing trust structures set up under the old rules generally need a full review with a specialist adviser.
Am I affected if I am a long-term UK resident, not a new arrival?
Yes, potentially more than new arrivals in some respects — once you have been UK tax resident for the relevant number of years, you are treated as a "long-term resident" for both income/gains and Inheritance Tax purposes and lose access to any FIG-style exemption, being taxed on worldwide income, gains and, eventually, worldwide assets for IHT, regardless of your domicile status.
Is this the same across the UK, or does Scotland differ?
Non-dom and residence-based tax reform is a reserved (Westminster) matter for income tax on non-savings, non-dividend income structure and for the FIG regime itself, though Scottish Income Tax rates and bands still apply to non-savings, non-dividend income for Scottish taxpayers once that income becomes taxable in the normal way — the FIG mechanics themselves are UK-wide.
Where can I get help understanding my own position?
Because the reform affects historic offshore structures, mixed funds, trusts and Inheritance Tax exposure differently depending on your personal residence history, this is a genuinely complex area where generic guidance has real limits. Anyone previously using the remittance basis, or planning a move to or from the UK, should get advice from a specialist private client tax adviser rather than relying solely on general guides.
Disclaimer: Non-dom and residence-based tax reform is a complex, individually-fact-dependent area. This guide is general information, not personalised tax advice — get advice from a specialist private client tax adviser before acting on it.
