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Important tax changes are coming for UK non-doms residents

Starting in April 2025, The UK government is eliminating the consideration of domicile in residents’ taxation.

New arrivals with a decade of non-residence will enjoy a four-year grace period, exempt from tax on non-UK income and capital gains. This includes the ability to bring funds into the UK without incurring additional charges.

Existing non-doms with over four years of residence will lose access to the remittance basis. Transitional provisions introduce temporary 50% tax relief on personal foreign income for the tax year 2025/26.

Non-resident trusts will lose protection for new income post-April 6, 2025, while those established before this date remain shielded unless distributions benefit UK residents with over four years of residency.

The approach to inheritance tax (IHT) is pending, with plans for consultation on a potential shift to a fully residence-based system.

Assets settled into trusts by non-UK domiciled individuals before April 2025 will remain beyond the scope of the UK IHT regime, showcasing a transitional strategy to retain non-doms amidst the evolving tax framework.

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