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3 Apr

Latest News from ACCA

Changes to the taxation of non-UK domiciled individuals

The government has announced plans to replace the non-dom tax regime with a fairer system starting in April 2025. While often referred to as an abolition, it's more accurately described as a replacement regime. This move is aimed at maintaining the UK's attractiveness to international investors while ensuring fairness in taxation.

Under the new system, individuals arriving in the UK or returning after at least 10 years overseas can elect not to be taxed on their foreign income or gains during the first four years of UK tax residence (the FIG regime). This will result in the loss of certain allowances, but individuals won't be taxed on foreign income or gains, regardless of whether they are brought to the UK. There are also concessions to soften the impact for current remittance basis users transitioning to the new system.

Additionally, a Temporary Repatriation Facility (TRF) will be available for bringing pre-April 6, 2025 income and gains to the UK at a reduced tax rate. Individuals returning to the UK after spending over 10 tax years overseas can benefit from the FIG regime on their return.

Overall, these proposals aim to provide more favorable tax treatment for many individuals, particularly UK domiciled returning expatriates and formerly domiciled residents.

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