The UK’s long-standing non-domiciled (non-dom) tax regime was fully abolished on 6 April 2025, a change confirmed across official government guidance and professional tax analysis. It has been replaced by the Foreign Income and Gains (FIG) regime, which offers a four-year relief window for newly arrived individuals meeting the eligibility criteria.
As we are now in the 2026–27 tax year, many affected individuals are mid-route through the transition period. According to analysis published by St. James’s Place on 31 March 2026, this is an “active” period requiring careful attention to deadlines and rate changes. This article explains what has changed, what rates currently apply, and what high-net-worth individuals, expats, and their advisers should check now. Factual claims are drawn from the confirmed evidence base unless labelled as Zagdim editorial analysis.
The Core Change: How UK Taxation Shifted from Domicile to Residency
Domicile is no longer a factor for inheritance tax (IHT) purposes in the UK. IHT liability is now based on long-term residency — specifically, having lived in the UK for 10 consecutive years, or 10 or more years out of the last 20.
For individuals who previously structured their affairs around non-dom status, this means the concept of “domicile of origin” no longer provides the shelter it once did. A comprehensive review of estate planning may now be necessary. The £2,000 annual allowance for foreign income — previously available to non-doms — has also been scrapped.
Transitional Provisions for Existing UK Residents
Transitional arrangements apply in certain circumstances. Individuals who were non-UK resident in 2025–26 and were not UK domiciled as of 30 October 2024 continue to be assessed under the old rules unless and until they return to the UK. For those already UK-resident, the new 10-year residency test applies from 6 April 2025. For trusts, non-UK assets held in excluded property trusts established before 30 October 2024 may retain existing IHT treatment, subject to the specific conditions of each structure. Once a long-term UK resident subsequently leaves the UK, an IHT tail period of between three and ten years applies — depending on the length of prior UK residence — during which worldwide assets remain within the IHT net.
FIG Regime Eligibility: Who Qualifies for the Four-Year UK Tax Relief Window
The FIG regime provides a four-year relief window during which foreign income and gains are not subject to UK tax for qualifying individuals.
Eligibility Conditions
The FIG regime requires that an individual has been non-UK tax resident for at least 10 consecutive years immediately before the year of arrival or return. This requirement applies equally to first-time arrivals and to returning UK nationals or former residents — domicile and citizenship are both irrelevant for eligibility purposes. A British citizen who maintained UK domicile but lived abroad for over a decade can qualify, while a former non-dom who remained UK-resident throughout cannot.
How the Four-Year Clock Works
The four-year window runs continuously from the first year of UK residence and cannot be paused. If an individual becomes non-resident during the window and returns, the absent years are permanently lost. Split years count as full years for the purpose of calculating the window. Individuals who arrived in the UK between the 2022–23 and 2024–25 tax years and met the 10-year non-residence requirement are already partway through their four-year window and may qualify for FIG from April 2025 onwards.
Costs of Claiming FIG Relief
Claiming the FIG regime means forfeiting the UK income tax personal allowance (currently £12,570) and the capital gains tax annual exempt amount. After the four-year window closes, the individual is taxed on their worldwide income and gains on the full arising basis, in the same way as any other UK resident.
Temporary Repatriation Facility (TRF): Confirmed Rates, Deadlines, and How It Works
The TRF allows individuals who previously used the remittance basis to designate pre-2025 foreign income and gains and pay tax at a reduced flat rate.
Confirmed rates:
- 2025–26 and 2026–27 tax years: 12%
- 2027–28 tax year: 15%
- Without TRF: up to 45% on foreign income; 24% on foreign capital gains
The TRF operates via a designation election made through Self Assessment. Importantly, designation is not the same as physical remittance — funds do not need to be brought to the UK in the same tax year the designation is made. Once designated and the TRF charge paid, the amount can be remitted to the UK at any time without triggering further income tax or capital gains tax.
Filing deadlines for TRF designations:
- 2025–26 designations: 31 January 2027
- 2026–27 designations: 31 January 2028
- 2027–28 designations: 31 January 2029
Foreign Tax Credit Relief and the TRF: A Critical Distinction
No foreign tax credit can be claimed against the TRF charge. Because the TRF is a flat-rate concessionary regime, the standard foreign tax credit mechanism does not apply to it. However, foreign tax already paid on designated amounts can be deducted from the gross amount before the TRF rate is applied — reducing the taxable base, though not the rate itself. This is a material distinction for readers with significant pre-2025 foreign income on which tax was already paid in another jurisdiction. Whether TRF designation remains commercially advantageous in those circumstances requires professional assessment.
UK Inheritance Tax After Non-Dom Abolition: The New Residency-Based Test
The new IHT framework bases liability on long-term UK residency rather than domicile. The practical changes are significant. A person who has lived in the UK for 10 consecutive years, or 10 out of the last 20, is now subject to UK IHT on their worldwide assets at 40% above the nil-rate band (currently £325,000, or up to £1 million for couples applying the residence nil-rate band). The old 15-year deemed domicile rule has been replaced by this lower 10-out-of-20-years threshold, meaning some individuals reach IHT exposure sooner than under the previous regime.
Previously, a non-dom could avoid IHT on foreign assets by keeping them outside the UK. That protection no longer exists once the long-term residency threshold is reached. The excluded property trust — previously a common tool for shielding non-UK assets — has also been affected. Trust chargeability now fluctuates based on the settlor’s residency status, with periodic 10-year anniversary charges of up to 6% and proportionate exit charges applicable to affected structures. Assets settled before 30 October 2024 may retain some protection under transitional provisions, but all trust arrangements should be reviewed.
Note: individuals covered by specific double tax treaties — particularly the US–UK Gift and Estate Tax Treaty — may be assessed differently. This should be confirmed with a specialist.
The material reviewed for this article does not confirm whether the 10-year residency test counts partial tax years. Readers should confirm this point with a qualified UK tax adviser.
What High-Net-Worth Individuals and Expats Should Review in the 2026–27 Tax Year
Based on the confirmed facts and supplementary research, the following areas require attention:
- TRF window: The 12% rate applies only to designations made in 2025–26 and 2026–27. After 5 April 2027, the rate rises to 15%. The filing deadline for 2026–27 designations is 31 January 2028.
- FIG eligibility: If you arrived in the UK after at least 10 consecutive years of non-UK residence, the four-year FIG window may apply. The clock runs from the first year of UK residence and cannot be paused or reset by brief absences.
- IHT exposure: Review your UK residency history. If you have been UK-resident for 10 consecutive years or 10 out of the last 20, your worldwide assets are now potentially within the UK IHT net.
- Trust structures: Excluded property trusts created before 30 October 2024 may carry transitional protection, but all trust arrangements should be reviewed in light of the new residency-based rules.
- Foreign tax credit vs. TRF: Foreign tax credits do not reduce the TRF charge, but previously paid foreign tax can reduce the gross amount subject to TRF. Assess whether TRF designation is efficient given your specific tax position.
- Estate planning: With domicile removed as a factor, wills, trust structures, and offshore asset arrangements may need updating to reflect new residency-based IHT exposure.
Transition Risks: Where the New UK Tax Rules Leave Room for Error
The complexity of the transition rules means that errors can be costly. Late or missed TRF designations will result in standard remittance tax rates applying — potentially up to 45% on foreign income — with no equivalent facility available after the 2027–28 tax year. The protected trust regime has been fully removed, including for existing trusts, meaning affected individuals who had not completed a structural review before 6 April 2025 may face unintended IHT exposure. The interaction between the FIG regime and existing double tax treaties is not fully resolved in the evidence reviewed. Treaty non-residency may count towards the 10-year FIG eligibility test in some circumstances, but this should be confirmed with a specialist before relying on it.
Zagdim Analysis
The confirmed rate schedule makes the practical implication clear: for those with significant pre-2025 foreign income still held offshore, the 2026–27 tax year is the last opportunity to designate or remit at the 12% TRF rate. Whether to act this year — and how much to designate — depends on individual circumstances including the quantum of offshore income, foreign tax already paid, and overall UK tax position. These are decisions that require professional advice, not generic planning rules.
More broadly, this reform represents a structural shift in how the UK taxes globally mobile individuals. The move from domicile to residency affects not just income and gains but inheritance planning, trust structures, and long-term estate strategy. For high-net-worth individuals and internationally mobile families, this is not a one-off filing exercise — it is an ongoing planning consideration that will affect decisions about where to live, how long to stay, and how to structure assets across jurisdictions.
Summary of Confirmed Changes to the UK Non-Dom Tax Regime
| Aspect | Old Regime (pre-April 2025) | New Regime (from April 2025) |
|---|---|---|
| IHT basis | Domicile-based | Residency-based (10+ years) |
| £2,000 foreign income allowance | Available | Scrapped |
| New arrivals’ foreign income relief | Unlimited remittance basis | 4-year FIG window; requires 10-year prior non-residence |
| Pre-2025 foreign income remittance | Subject to full rates | TRF at 12% (2025–26 and 2026–27), 15% (2027–28) |
| Foreign tax credit against TRF | N/A | Not claimable; foreign tax deductible from gross amount only |
| Double taxation relief (general) | Available | Available via foreign tax credit, outside TRF context |
| Excluded property trust protection | Generally available | Removed; trust IHT now linked to settlor’s residency status |
Key Dates and Rate Changes
| Event | Confirmed Date |
|---|---|
| Non-dom regime abolished | 6 April 2025 |
| TRF at 12% (designation window) | 2025–26 and 2026–27 tax years |
| TRF filing deadline for 2026–27 designations | 31 January 2028 |
| TRF rate rises to 15% | 2027–28 tax year |
| TRF facility closes entirely | After 2027–28 tax year |
Points Requiring Further Verification Before Publication
The following points are not fully resolved in the evidence reviewed and should be confirmed with a UK tax adviser or HMRC directly before being relied upon: whether the 10-year IHT residency test includes partial tax years; whether the 10-year IHT clock runs from the current date or the date of death; how the FIG regime interacts with specific double tax treaties where treaty non-residency may affect the eligibility count; and whether TRF applies in full to pre-2025 capital gains held inside trust structures.
The UK’s tax landscape for globally mobile individuals has changed in ways that affect not just annual filings but long-term planning around where to live, how long to stay, and how to structure assets. The 2026–27 tax year sits at an active inflection point — the 12% TRF window is open now and closes in April 2027, while the shift to residency-based IHT means every additional year of UK residence carries new implications for estate planning. Reviewing your position with a qualified UK tax adviser before April 2027 is advisable.
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This article is based on officially verified sources current as of May 2026. Tax requirements change frequently. Always confirm your specific situation with a licensed UK tax adviser or HMRC directly.
