The abolition of the existing ‘non-dom’ tax regime in the UK from 6 April 2025. What does this mean in terms of the UK immigration law?
Aug 08 2024
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The abolition of the existing ‘non-dom’ tax regime in the UK from 6 April 2025. What does this mean in terms of the UK immigration law?
The UK government has recently announced sweeping changes to the resident non-domicile (non-dom) tax regime, set to take effect from April 2025. While much of the discussion has focused on the tax implications, these changes also have significant ramifications for migrants in the UK. Here is a closer look at what these changes mean from an immigration standpoint.
For many years, the non-dom status has been a key feature of the UK’s appeal to wealthy immigrants and expatriates. This status allowed individuals to reside in the UK while maintaining their domicile abroad, offering various benefits and a degree of separation between their UK and international financial affairs.
However, starting in April 2025, the UK government will abolish the remittance basis and the concept of domicile for tax purposes. This fundamental shift marks the end of a long-standing regime that has played a significant role in attracting global talent and investment to the UK.
In place of the non-dom status, the government will introduce a Four-Year Foreign Income and Gains (FIG) system. Under this new system, individuals who have not been UK-resident for the 10 years before the 2025/26 tax year will be eligible for certain benefits for a maximum of four tax years. While the specifics of these benefits are primarily tax-related, the eligibility criteria based on residency history will be crucial for immigrants planning their move to the UK.
The upcoming changes will also see the abolition of the protected trust regime from 6 April 2025. For many immigrants, trusts have been a key tool in managing their affairs across borders. The removal of this regime signifies a need for immigrants to reassess their financial and legal structures in the UK.
The introduction of a new residence-based inheritance tax (IHT) regime will further impact individuals. Under the new rules, the basic test for whether non-UK assets are in scope for IHT will be based on the individual’s residency history in the UK. This change highlights the importance of understanding residency criteria and its implications on one’s global assets.
The government has indicated that there will be transitional provisions to help ease the shift from the old to the new system. Additionally, anti-avoidance legislation will be reviewed, with potential changes coming into effect from April 2026. For immigrants, this means staying informed and possibly participating in consultations to ensure their interests are considered.
From an immigration standpoint, these changes signify a substantial shift in the UK’s approach to attracting and retaining global talent. Here are a few key points for immigrants to consider:
In conclusion, the UK’s revised immigration and tax policies represent a significant shift in the landscape for immigrants. While these changes bring new challenges, they also offer an opportunity to reassess and optimise one’s approach to living and working in the UK. By staying informed and proactive, immigrants can navigate this new environment successfully and continue to thrive in the UK.
Gherson’s Immigration Team are highly experienced in advising on UK visa matters. If you have any questions arising from this blog, please do not hesitate to contact us for advice, send us an e-mail, or, alternatively, follow us on X, Facebook, Instagram, or LinkedIn to stay-up-to-date.
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.
©Gherson 2024
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