How does the non-domicile regime work for UK tax?
Answered 17 March 2026
The Non-Domicile Regime for UK Tax
This is a complex area that has undergone fundamental reform from 6 April 2025. The answer is structured in two phases: the pre-2025 regime and the post-2025 replacement.
PHASE 1: THE OLD NON-DOMICILE / REMITTANCE BASIS REGIME (up to 5 April 2025)
What the law says
The remittance basis was an alternative basis of taxation available only to individuals who were UK resident but not domiciled in the UK. Under it, only UK-source income and gains were taxed on an arising basis — foreign income and gains were sheltered from UK tax unless brought to (remitted to) the UK.
Deemed domicile rules (introduced from 6 April 2017 by s.835BA ITA 2007, inserted by Finance (No.2) Act 2017) meant that even a non-UK domiciled individual could be treated as UK domiciled — and therefore unable to claim the remittance basis — if either of two conditions was met:
- Condition A: The individual was born in the UK, had a UK domicile of origin, and was UK resident for the relevant tax year.
- Condition B: The individual had been UK resident for at least 15 of the 20 tax years immediately preceding the relevant tax year.
Capital gains: A non-UK domiciled individual (not deemed domiciled) was liable on gains from UK-situated assets on an arising basis, but could claim the remittance basis for gains on foreign-situated assets, meaning those gains were only taxable if remitted to the UK.
The Remittance Basis Charge (RBC): Long-term UK residents (aged 18+) who claimed the remittance basis had to pay an annual charge:
- £30,000 — resident in at least 7 of the preceding 9 tax years
- £60,000 — resident in at least 12 of the preceding 14 tax years
- £90,000 — resident in at least 17 of the preceding 20 tax years (2015-16 and 2016-17 only, before deemed domicile made this tier redundant)
These charge thresholds are set out in s.809C ITA 2007.
Loss of annual exemption: Individuals claiming the remittance basis under s.809B also lost their entitlement to the annual exempt amount for CGT purposes.
IHT: For inheritance tax, domicile limited the charge to UK-situated assets for non-domiciles. Deemed domicile for IHT required residence in at least 15 of the 20 preceding tax years and at least 1 of the 4 tax years ending with the relevant tax year.
HMRC guidance / practice
The remittance basis could not be used by anyone with a domicile of origin or domicile of choice in the UK, or anyone deemed domiciled in the UK.
From 6 April 2017, individuals born in the UK with a UK domicile of origin were taxed on the arising basis on worldwide income and gains even if they had subsequently acquired a foreign domicile of choice (Condition A individuals). Similarly, those resident for 15+ of the previous 20 years (Condition B) could no longer claim the remittance basis.
A narrow exception existed: even deemed domiciled individuals could still use the remittance basis under s.809D ITA 2007 if their unremitted foreign income and gains were under £2,000 for the tax year.
Deemed domicile status under Condition B is not permanent — it can be lost if the individual leaves the UK and has at least 6 tax years as a non-UK resident in the 20 years before the relevant tax year.
PHASE 2: THE NEW REGIME FROM 6 APRIL 2025
What the law says
From 6 April 2025, domicile is no longer a relevant connecting factor for income tax and CGT purposes. All UK residents are taxed on the arising basis on their worldwide income and gains. For IHT, domicile is replaced by long-term UK residence.
The replacement relief is the FIG (Foreign Income and Gains) regime, contained in ss.845A–845J ITTOIA 2005 (inserted by Finance Act 2025).
HMRC guidance / practice
Who qualifies: A "qualifying new resident" is someone who comes to the UK after at least 10 consecutive tax years of non-UK residence. They can claim relief on foreign income and gains for their first 4 years of UK residence. Crucially, neither nationality, domicile, nor previous remittance basis use affects eligibility.
How it works: Relief must be actively claimed — there is no automatic or de minimis application. Claims can be made from the 2025-26 tax year onwards. If claimed, there is no tax liability when relieved foreign income and gains are brought to the UK.
Pre-April 2025 foreign income: Former remittance basis users cannot claim FIG relief for foreign income and gains that accrued before 6 April 2025. Such amounts, if remitted on or after 6 April 2025, remain taxable at normal rates — though a Temporary Repatriation Facility (TRF) is available (2025-26 to 2027-28) allowing designation of such amounts at a reduced tax rate.
Backdating: Although the FIG regime started on 6 April 2025, an individual may already be a qualifying new resident if they came to (or returned to) the UK in the 2022-23 tax year or later.
Summary Table
| Feature | Pre-6 April 2025 | From 6 April 2025 |
|---|---|---|
| Basis | Remittance basis (if non-dom) | Arising basis (all residents) |
| Key connecting factor | Domicile | Tax residence |
| Relief available | Remittance basis (foreign income/gains untaxed unless remitted) | FIG regime (4-year relief for qualifying new residents) |
| Annual charge | £30k / £60k / £90k RBC | None |
| Bringing funds to UK | Taxable remittance | No tax liability (if FIG-relieved) |
| IHT | Domicile-based | Long-term UK residence-based |
Citation sources
From 6 April 2025, all UK residents are taxed on the arising basis of assessment on their worldwide income and gains. This is addressed in the Residence and FIG Regime Manual from RFIG40000. For details of the remittance basis of assessment which was available prior to 6 April 2025 see RDRM31030. Individuals who come to the UK after a period of at least 10 consecutive tax years of non-UK residence are able to claim UK tax relief on foreign income and gains that accrue during their first 4 years
Individuals claiming the remittance basis under section 809B also lose their entitlement to an annual exempt amount for capital gains tax purposes. Note: Foreign chargeable gains are only taxed on the remittance basis for non-domiciled (ND) individuals. However remittance basis users who are domiciled within the UK but not ordinarily resident (NOR) still lose their AEA, even though their foreign chargeable gains are not within the remittances regime. From 6 April 2013 the concept of ordinary res
From 6 April 2025, for inheritance tax purposes, domicile is replaced by long-term UK residence and you can find details of these rules at IHTM47000. Inheritance Tax (IHT) already has deemed domicile rules (IHTM13024). There are three changes to these rules all of which are effective from 6 April 2017: a reduction in the number of years of residence in the UK necessary for deemed domicile to apply (IHTM13061) a difference to the way the years are counted (IHTM13061) and a new category of deemed
Part 14 Income tax liability: miscellaneous rules Chapter A1 Remittance basis Application of remittance basis Claim for remittance basis by long-term UK resident: nomination of foreign income and gains to which section 809H(2) is to apply 809C 1 This section applies to an individual for a tax year if ...— za the tax year is the tax year 2024-25 or an earlier tax year, a the individual is aged 18 or over in that year, and b the individual meets ... the 12-year residence test or the 7-year residen
From 6 April 2025 it is not possible to use the remittance basis of taxation, however, any foreign income or gains that have arisen to a former remittance basis user prior to this date will continue to be taxed at the usual tax rates if they are remitted to the UK on or after 6 April 2025, subject to any amounts designated under the temporary repatriation facility (TRF) – see RDRM71000. The guidance in this section only applies to tax years up to and including the 2024-25 tax year and remains f
From 6 April 2025, the concept of domicile as a relevant connecting factor in the tax system has been replaced by a system based on tax residence. This guidance remains for reference purposes only. It is possible for an individual who becomes deemed domicile under Condition B to lose this deemed status - it does not last indefinitely. They can lose their deemed domicile status if they leave the UK and there are at least 6 tax years as a non-UK resident in the 20 tax years before the relevant tax
From 6 April 2025, all UK residents are taxed on the arising basis of assessment on their worldwide income and gains. For details of the remittance basis of assessment which was available prior to 6 April 2025 see RDRM31030. Individuals who come to the UK after a period of at least 10 consecutive tax years of non-UK residence are able to claim UK tax relief on foreign income and gains that accrue during their first 4 years of UK residence. The regime that provides for these reliefs for qualifyi
ion 809M ITA 2007. Under the legislation, taxable remittances of an individual’s income or gains may be made by, and/or for the benefit or enjoyment of a relevant person, and this will result in a tax charge on the individual. Relevant Tax Increase This term is used in relation to computing the remittance basis charge that was payable by long-term residents. Broadly, it is a calculation that is the difference between the total amount of: income tax and capital gains tax payable by a long-term re
From 6 April 2025 it is not possible to use the remittance basis of taxation, however, any foreign income or gains that have arisen to a former remittance basis user prior to this date will continue to be taxed at the usual tax rates if they are remitted to the UK on or after 6 April 2025, subject to any amounts designated under the temporary repatriation facility (TRF) – see RDRM71000. The guidance in this section only applies to tax years up to and including the 2024-25 tax year and remains f
lights in the UK using his offshore credit card, in respect of non-relevant persons. The Appellant also purchased jewellery in the UK using his offshore credit card. (7) The Appellant has paid tax on some remittances which do not form part of the decision under appeal. (8) On 27 January 2017, HMRC received the Appellant’s tax return for the year ending 5 April 2016. The Appellant made a claim to the remittance basis of taxation but no remittances were included in his tax return. (9) On 11 Januar
From 6 April 2025 it is not possible to use the remittance basis of taxation, however, any foreign income or gains that have arisen to a former remittance basis user prior to this date will continue to be taxed at the usual tax rates if they are remitted to the UK on or after 6 April 2025, subject to any amounts designated under the temporary repatriation facility (TRF) – see RDRM71000. The guidance in this section only applies to tax years up to and including the 2024-25 tax year and remains f
PART 1 Direct taxes Domicile, overseas property etc Deemed domicile: income tax and capital gains tax 29 1 In Chapter 2A of Part 14 of ITA 2007 (income tax liability: domicile), after section 835B insert— Deemed domicile 835BA 1 This section has effect for the purposes of the provisions of the Income Tax Acts or TCGA 1992 which apply this section. 2 An individual not domiciled in the United Kingdom at a time in a tax year (“the relevant tax year”) is to be regarded as domiciled in the United Kin
If an individual is domiciled or deemed domiciled* in the UK he or she is liable on gains arising from assets situated anywhere in the world. However, if the individual is not domiciled and not deemed domiciled* in the UK, he or she is still liable on gains arising from assets situated in the UK but may (if remittance basis is due) not be liable on gains arising from assets located outside the UK except to the extent that those gains are remitted to the UK. See CG25300-CG25431. ‘Domiciled in the
Section 845A ITTOIA 2005 Paragraphs 1 and 2 Schedule D1 TCGA 1992 An individual who is a ‘qualifying new resident’ and meets the eligibility criteria set out at RFIG44000 must decide whether they want to use the new FIG regime to claim relief on their foreign income and gains in their first 4 years of UK residence. A claim under the FIG regime is a claim to relief for tax purposes. A claim can be made for foreign income, or foreign gains, or both. They may also be able to make an election for ne