What Is Non-Domiciled Status and How Does It Work?
By Georgia Holmes
Discover how the UK’s non-dom tax changes affect international wealth, including foreign income and gains, Inheritance Tax, overseas trusts and transitional relief for historic funds.
For many years, the UK’s non-domiciled, or “non-dom”, tax rules played an important role in how internationally mobile individuals managed their wealth. People who lived in the UK but had a permanent home or long-term connection overseas could, in certain circumstances, benefit from different tax treatment on foreign income and gains.
These rules were particularly relevant to people with overseas property, international investment portfolios, family businesses, trusts or inherited wealth. However, the UK tax system changed significantly on 6 April 2025. Non-dom status no longer provides the same tax treatment it once did, and tax residence is now central to the rules governing foreign income, capital gains and Inheritance Tax.
If you have international wealth or are considering moving to or from the UK, understanding these changes can help you plan ahead and avoid unexpected tax charges.
What did non-domiciled status mean?
Domicile was a legal concept used to describe the country regarded as a person’s permanent home. It was different from nationality, citizenship and tax residence.
Historically, someone could be resident in the UK for tax purposes but domiciled elsewhere. Depending on their circumstances, they might have been able to claim the remittance basis of taxation.
Under the remittance basis, eligible individuals generally paid UK tax on their UK income and gains, but foreign income and gains could be taxed only when brought into or used in the UK. This was subject to detailed rules and exceptions.
For example, someone living in London with investments overseas might previously have been able to leave certain foreign investment income outside the UK and defer UK tax on it, provided they met the relevant conditions and followed the remittance rules.
The system was complex. Bringing money into the UK could trigger tax, and individuals who had lived in the country for a long time could face additional charges or lose access to the remittance basis.
What changed to the UK non-dom rules in April 2025?
From 6 April 2025, the UK abolished the remittance basis for new tax years and removed domicile as the main connecting factor for Income Tax and Capital Gains Tax treatment.
Instead, a new Foreign Income and Gains (FIG) regime was introduced for qualifying new UK tax residents. The changes also introduced a residence-based approach to determining whether certain overseas assets fall within the scope of UK Inheritance Tax.
This means that simply describing yourself as non-domiciled no longer determines whether your overseas wealth is subject to UK tax. Your tax residence, how long you have been outside or inside the UK, the type of income or asset you hold and the relevant transitional rules all matter.
People who previously used the remittance basis may also have foreign income and gains from earlier tax years that need separate consideration. The new rules do not automatically make all historic overseas funds tax-free when brought to the UK.
How does the new Foreign Income and Gains regime work?
The FIG regime is intended to provide temporary tax relief for people…