Non-dom status to be abolished

New residency-based system to be introduced from April 2025

The government will abolish the remittance basis of taxation for non-UK domiciled individuals and replace it with a simpler residence-based regime, which will take effect from 6 April 2025.

Individuals who opt into the regime will not pay UK tax on foreign income and gains for the first four years of tax residence.

Overseas Workday Relief (OWR) will be reformed with eligibility for the relief based on the new regime. OWR will continue to provide income tax relief for earnings from duties carried out overseas for the first three years of tax residence with restrictions on remitting these earnings removed.

The government has also announced an intention to move to a residence-based regime for inheritance tax, with plans to publish a policy consultation on these changes, followed by draft legislation for a technical legislation, later in the year.

Further details of the changes applicable to the taxation of non-UK domiciled individuals effective from 6 April 2025 can be found in the Technical Note published by the government.