UK Non-Dom Tax Changes 2025: What the New FIG Regime Means

The UK non-dom tax changes 2025 bring an end to a tax regime that shaped international tax planning for over two centuries. From 6 April 2025, the non-domiciled (non-dom) system will no longer apply. It is being replaced by a new Foreign Income and Gains (FIG) regime.

These reforms will affect how foreign income and offshore gains are taxed in the UK. If you are a globally mobile individual, investor, or settlor of a trust, you need to act now.

Table of Contents

• What Were the Rules Before the UK Non-Dom Tax Changes 2025?

• What Is the Foreign Income and Gains (FIG) Regime? 

• Key Features of the Foreign Income and Gains Regime

• Transitional Provisions for Existing Non-Doms 

  • Capital Gains Tax Rebasing

  • Temporary Repatriation Facility (TRF)

• Implications for Trusts and Inheritance Tax 

• Conclusion 

What Were the Rules Before the UK Non-Dom Tax Changes 2025?

Under the old system, non-doms who lived in the UK could choose the remittance basis. This meant they only paid UK tax on foreign income and gains if they brought that money into the UK.

This option allowed many international individuals to live, work, and invest in the UK without paying tax on their global income unless they chose to use it here.

👉 Learn more about non-domicile tax status in the UK

What Is the Foreign Income and Gains (FIG) Regime? 

The FIG regime is a residence-based tax system set to replace the remittance basis of taxation. Under the new rules, individuals who become UK tax residents after a period of 10 consecutive tax years of non-UK residence can benefit from a four-year exemption on foreign income and gains. During this period, qualifying individuals will not be taxed on foreign income and gains, regardless of whether these are brought into the UK.  

This is a clean break from the old remittance-based system, no need to track whether funds have been brought into the UK or kept offshore. For those who qualify, it's straightforward and generous… but only temporary. 

Key Features of the Foreign Income and Gains Regime

• Eligibility Criteria: To qualify, individuals must not have been UK tax residents in the 10 consecutive tax years prior to becoming UK tax residents. 

• Four-Year Exemption: Qualifying individuals will enjoy a 100% exemption from UK tax on foreign income and gains for their first four years of UK tax residence. 

• Loss of Allowances: Electing into the FIG regime results in the loss of personal allowances and the capital gains tax annual exempt amount for the tax year.  

• Offshore Trusts: Distributions from offshore trusts received during the four-year exemption period will not be taxed in the UK.  
  

Transitional Provisions for Existing Non-Doms

For individuals currently benefiting from the remittance basis who do not qualify for the new FIG regime, several transitional measures are in place: 

Capital Gains Tax Rebasing

If you’ve used the remittance basis in the past and you still own foreign assets, you may be allowed to rebase them to their value as of 5 April 2019. That could significantly reduce your capital gains tax bill when you eventually sell them. 

👉 Read: UK Capital Gains Tax for Non-Residents

Temporary Repatriation Facility (TRF)

From 6 April 2025, you’ll be able to bring in foreign income and gains earned before that date into the UK and only pay 12% tax on it. That’s a generous deal compared to regular income tax rates, but it’s only available for two years (2025/26 and 2026/27). For the final tax year 2027/28 the rate payable will be 15%. 

Compare that to paying up to 45% under full income tax rates and it’s easy to see why taking advantage of this window could save hundreds of thousands.

Example:

If you remit £1,000,000 of foreign income in: 

• 2025/26 or 2026/27 → tax payable: £120,000

• 2027/28 → tax payable: £150,000

• Outside TRF window → tax payable: £450,000 (at 45%) 

That’s a potential saving of £300,000–£330,000 if action is taken during the TRF period. 

👉 How to prepare for the 2025 tax changes

Implications for Trusts and Inheritance Tax

The new regime also impacts offshore trusts and inheritance tax (IHT): 

• Offshore Trusts: From 6 April 2025, protections that previously kept income and gains inside these structures outside the scope of UK tax will be removed unless you're in the four-year FIG window. 

• Inheritance Tax: The government is proposing a move to a residence-based system, too. While there’s still consultation underway, the general idea is that individuals who have been UK-resident for 10 years or more would become liable for UK IHT on worldwide assets. 
  

Conclusion

The new Foreign Income and Gains regime marks a massive change for the UK’s tax system. 

For new arrivals, it’s a welcome bit of clarity (and generosity if you think about it). But for long-standing non-doms, it means higher tax bills and a need to reassess their financial structures. Many have simply decided to get up and leave the country! 

Whether you’re moving to the UK, leaving the UK or were previously considered a non-domiciled individual, the best time to review your position was 6 months ago. The next best time is now, today! 

Contact ASWATAX to explore your options, as international tax matters are an area we are incredibly well-versed with. 

Meet Omar Omar is a Chartered Tax Advisor (a.k.a an expert on tax issues) and founder of ASWATAX. He regularly shares his knowledge and best advice here in his blog and on other channels such as LinkedIn. Book a call today to learn more about what Omar and ASWATAX can do for you.

*Disclaimer: ASWATAX is a firm of Chartered Tax Advisors, and we strive to provide accurate, up-to-date tax insights. Tax laws may change, so this content is for general guidance only and not a substitute for professional advice. Seek independent tax and legal counsel before making decisions. ASWATAX is not liable for any loss from reliance on this information. Use at your own risk.