Reaction From Irwin Mitchell's International & High Net Worth Team

In yesterday's Budget announcement, Chancellor Rachel Reeves unveiled significant updates regarding the non-domiciled (non-dom) tax status.

The Chancellor confirmed that from April 2025, the non-dom status will be abolished and be replaced by a new residence-based system.

The change marks a pivotal shift in the government’s approach to tax policy and is expected to raise £12.7 billion over the next five years.

Expert Opinion

"The Budget confirmed the move from domicile to long-term residence as the factor that determines the applicability of UK personal taxes from 6th April 2025.

"There are no major differences from the income tax and capital gains tax plans that were announced in May and August this year - the four-year FIG regime for new arrivals and temporary repatriation facility and capital gains tax for former remittance basis users will be implemented. We also have confirmation of major changes regarding inheritance tax.

"The worldwide estate of those who are resident for 10 out of 20 years will be subject to it, as will trusts settled by individuals who are long-term UK residents when an occasion for inheritance tax occurs. Non-UK assets in trusts settled by non-domiciled deceased settlors and individuals who are not long-term UK residents will however apparently not be subject to inheritance tax, which will be good news for expats in particular."

Helen Clarke, International & High Net Worth partner