Big Changes Ahead for Non-UK Domiciled Individuals: What You Need to Know 💼🌍
capitalgainstax crossbordertaxes domicilestatus expatsinuk expatstaxguide expatswealth figrelief financialadvisors financialplanning financialstrategy foreignincome globalexpat globalinvestments globaltaxstrategy globalwealthmanagement highnetworthindividuals hnwi inheritanceplanning inheritancetax internationalassets internationalfinance investmentplanning longtermresidents nondomiciledtax nondomlife nondomregulations nondomtaxrelief offshoreplanning proactivetaxplanning residencyplanning taxadvisory taxconsultantsuk taxconsulting taxefficiency taxfreeliving taxlawsuk taxplanning taxrelief taxresidency taxsavingtips temporaryrepatriationfacility trustreforms truststructures trusttaxation ukbudget2024 uktaxreforms uktaxsystem wealthmanagement worldwideincome Jan 14, 2025Big Changes Ahead for Non-UK Domiciled Individuals: What You Need to Know 💼🌍
By Mohamed Aboshanab, CEO of Global Expat
The UK tax landscape is evolving dramatically, and non-UK domiciled individuals—commonly referred to as "non-doms"—will soon face significant changes to their taxation. Following the Labour Government’s Autumn Budget 2024, new rules are set to come into effect from April 6, 2025. These changes impact foreign income gains (FIGs), trust structures, and even inheritance tax (IHT). If you’re a UK citizen or resident, understanding these shifts is critical to safeguarding your financial interests. 🌟📊
📌 Key Changes in a Nutshell
1️⃣ Foreign Income Gains (FIGs) Relief for Newcomers
New arrivals to the UK will enjoy 100% relief on FIGs for their first four years of UK tax residency—provided they haven’t been UK tax residents in the past 10 years. However, after this period, the worldwide income of UK residents becomes fully taxable.
💡 Tip: If you're planning a move to the UK, carefully time your arrival to maximize this benefit.
2️⃣ Impact on Trust Structures
From April 2025, the rules protecting settlor-interested trusts will change. Previously, non-doms could shield trust-held income and gains from UK taxes. Under the new rules:
- Trusts will be taxed as if the settlor were a UK-domiciled resident.
- Trust protections will not apply unless the individual qualifies for the four-year FIG regime.
💡 Tip: Review your trust structures to identify vulnerabilities and consider restructuring options to preserve tax efficiency.
3️⃣ Inheritance Tax (IHT) Overhaul
The government is shifting from a domicile-based system to a residence-based system for IHT:
- Non-UK assets will be taxable if the individual has been a UK resident for 10 out of the last 20 years.
- Excluded property trusts, once a favorite tool for non-doms, will no longer shield assets from IHT.
💡 Tip: Assess your residency history and plan for the potential inclusion of your global assets in the UK tax net.
4️⃣ Transitional Provisions
- Foreign assets held before April 6, 2025, can be rebased for Capital Gains Tax (CGT) purposes to their value as of April 5, 2017.
- A Temporary Repatriation Facility (TRF) offers reduced tax rates (12%-15%) for remitting pre-2025 income and gains over a limited three-year period.
💡 Tip: Use the TRF strategically to bring pre-2025 funds into the UK at a lower tax rate.
📈 What Does This Mean for You?
These changes will affect anyone with global income, trust structures, or international assets. Whether you’re a UK resident or planning to move, proactive planning is essential.
🛠️ My Advice to UK Citizens and Residents
-
Review Your Financial Position:
Consult your tax advisor to evaluate how the changes will impact your global income, trust structures, and inheritance planning. -
Restructure Trusts:
For individuals with significant assets in trusts, restructuring before April 2025 could save substantial taxes. -
Plan for IHT:
Understand your "long-term resident" status and plan accordingly to minimize IHT liabilities. -
Leverage Transitional Reliefs:
If you’ve been taxed on the remittance basis in the past, make full use of the TRF to repatriate funds at a reduced tax rate. -
Stay Informed:
Tax laws evolve, and staying ahead of these changes will protect your financial future.
🌍 Global Expat: Your Partner in Navigating Tax Changes
At Global Expat, we specialize in helping individuals and families navigate complex tax landscapes. From cross-border tax planning to trust restructuring, we’re here to guide you through these reforms. 📞💼
🔗 Let’s Connect:
- 🌐 Website: Global Expat
- 📞 WhatsApp: Chat with us
- 💬 Telegram: Message us
📢 #NonDomTax #UKTaxChanges #GlobalExpatLife #TaxPlanning #InheritanceTax #TrustPlanning #StayAhead
💼 Your future is tax-free™.
Let’s build it together. 🌟
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