UK Non-Dom Tax Changes & Abolition Master Guide 2026

What Changed From 6 April 2025?

From 6 April 2025, the UK ended the previous non-domicile/remittance-basis regime for new tax years and replaced the relevant Income Tax and Capital Gains Tax framework with a residence-based system. All UK residents are generally taxed on the arising basis on worldwide income and gains unless a specific new relief, exemption or transitional rule applies.

The 4-Year Foreign Income and Gains (FIG) Regime

The FIG regime is available to a qualifying new resident. The individual must be within one of their first four UK-resident tax years after a period of at least 10 consecutive tax years of non-UK residence. Relief must be claimed for the particular tax year and for the foreign income and/or gains the taxpayer chooses to relieve.

FIG Relief Is 100%, But It Is Not an Automatic Exemption

FIG relief is not automatically applied to every foreign income or gain received by a qualifying new resident. The taxpayer must make the appropriate claim, identify the foreign income and/or gains being relieved and complete the relevant Self Assessment pages. The relief applies only to eligible amounts.

Important Cost of Making a FIG Claim: Lost Allowances and Reliefs

A FIG claim can be highly valuable, but it is not cost-free from a wider tax-computation perspective. HMRC's 2026 guidance says that making a FIG claim causes the taxpayer to lose the Personal Allowance, CGT annual exempt amount and certain other allowances and reliefs, including the transferable tax allowance for married couples and civil partners.

FIG and Foreign Tax Credit Relief

A taxpayer cannot claim Foreign Tax Credit Relief on the same foreign income that is relieved under FIG. If some foreign income is covered by FIG and other foreign income is not, the appropriate foreign-tax-credit calculation can apply only to the non-FIG portion, subject to the ordinary credit rules.

Pre-6 April 2025 Foreign Income and Gains Are a Separate Category

Former remittance-basis users can still have foreign income and gains that arose before 6 April 2025 and were not previously remitted. Those historic amounts are not converted into FIG-relieved amounts merely because the individual subsequently qualifies for the FIG regime. They remain subject to the relevant transitional/remittance rules unless another rule, such as TRF, applies.

Temporary Repatriation Facility (TRF): 2026-27 Rate

The TRF is a temporary facility for former remittance-basis users. It operates for three tax years: 2025-26, 2026-27 and 2027-28. The rate is 12% in 2025-26 and 2026-27, rising to 15% in 2027-28. Therefore, for the current 2026-27 tax year, the applicable standard TRF rate is 12%, not a 12%-15% range.

How the TRF Works

The TRF is implemented through a designation/election on the Self Assessment return. A former remittance-basis user can designate qualifying pre-6 April 2025 foreign income and gains and pay the reduced TRF charge. Importantly, the taxpayer does not have to remit the designated amount during the TRF period in order to obtain the reduced-rate treatment, although they may choose to remit it.

FIG vs TRF: They Solve Different Problems

FIG and TRF are separate transitional measures. FIG relieves new foreign income and gains arising from 6 April 2025 onward for qualifying new residents. TRF is aimed at historic pre-6 April 2025 foreign income and gains held by former remittance-basis users. A person may, in some circumstances, qualify for both regimes, but the same historical amount cannot simply be treated as FIG income.

Offshore Trusts After 6 April 2025

The old protected-trust framework was materially changed from 6 April 2025. It is inaccurate to say simply that every 'protected offshore trust' lost all protection. The current rules distinguish trust residence, source of income, settlor residence, benefits received, settlements legislation, transfer-of-assets-abroad rules and the specific tax under consideration.

IHT: Long-Term UK Residence, Not a Simple 10-Year Trigger

From 6 April 2025, the foreign-asset scope of UK Inheritance Tax is generally determined by long-term UK residence. An individual is generally long-term UK resident if they have been UK resident for at least 10 of the previous 20 tax years immediately before the tax year containing the chargeable event. This is not the same as saying 'after 10 years, the global estate is automatically taxed at 40%'. The actual IHT liability still depends on exemptions, nil-rate bands, reliefs, asset situs and the chargeable-event calculation.

IHT Exit Tail After Leaving the UK

A person who becomes a long-term UK resident and then leaves the UK can remain within the long-term UK residence rules for a period after departure. The tail ranges from 3 to 10 tax years, depending on the residence history. HMRC gives 3 years for someone who was UK resident for 10 to 13 years, with the tail increasing as the prior UK-residence history rises.

Transitional CGT Rebasing

Certain current and past remittance-basis users can benefit from a transitional Capital Gains Tax rebasing rule for personally held foreign assets that they held on the relevant historic date, subject to the statutory conditions. The rebasing date was not a blanket rule for every foreign asset or every former non-dom.

Overseas Workday Relief (OWR) After Reform

The reform also changed Overseas Workday Relief. Qualifying employees can receive relief on certain foreign employment income relating to overseas duties, subject to the statutory conditions and a financial limit. OWR is distinct from FIG and should be considered separately when analysing internationally mobile employees.

Practical 2026 Non-Dom Reform Workflow

A correct 2026 analysis should first determine the relevant tax year and the individual's residence history. It should then separate post-6 April 2025 foreign income/gains from pre-6 April 2025 amounts, test FIG eligibility, check whether a TRF designation is available, consider lost allowances and foreign tax credits, analyse trust structures separately and calculate IHT under the long-term-residence rules.

Frequently Asked Questions (6)