From 6 April 2025, the way UK tax works for people living in the UK but who have their permanent home (domicile) outside the UK is changing. HMRC has released a new guide on the changes, which you can find here.

What were the old rules (before 6 April 2025)?

If you lived in the UK but your permanent home was abroad (called being ‘non-domiciled’), you had two choices:

1. Pay UK tax on your foreign income and gains as they arose, or
2. Use the remittance basis, which meant you only paid UK tax on foreign income and gains that you actually brought (or ‘remitted’) to the UK.

What’s changing from 6 April 2025?

• The remittance basis is being scrapped.
• From this date, all UK residents will be taxed on their worldwide income and gains as they arise – this is called the ‘arising basis’.
• A new 4-year rule will be introduced for people moving (or returning) to the UK after being non-resident for at least 10 years. During their first four years of UK tax residence, they won’t be taxed on foreign income and gains under this new Foreign Income & Gains (FIG) regime but they have to claim it.
• If you’ve used the remittance basis before, you’ll still need to pay UK tax on any foreign income or gains earned before 6 April 2025 that you later bring into the UK.

What about Inheritance Tax (IHT)?

There are also changes to how IHT works for people who have lived in the UK for a long time but are still non-domiciled:

• If you’ve been in the UK for at least 10 out of the last 20 tax years, your non-UK assets could now be subject to IHT – this is known as being a ‘long-term UK resident’.
• If you leave the UK after being a long-term resident, you’ll stay within the IHT rules for between 3 and 10 years, depending on how long you lived here before leaving.