Key Considerations and Action Steps on Abolishment of Remittance Basis Taxation

With the end of the non-domiciled regime confirmed for April 6, 2025, individuals impacted by these changes have four months to prepare. Here are essential planning points to consider before the new rules come into force.

As always, tailored advice is crucial due to the complexity of these changes.

– If you’ve been in the UK for more than four tax years before 5 April 2025, you might want to explore options to rearrange your assets, such as creating an offshore family investment company, a family partnership, or another tax shield.

– Take the most of the final year of the current regime and pay tax only on remitted income and gains, claiming tax credits under double taxation treaties.

– Starting from 6 April 2025, there is a three-year window to bring offshore income to the UK under favourable rates of 12-15%. However, a tax credit under DTA won’t be available in this case.

– Be aware that unremitted income and gains that arise before 6 April 2025 will continue to be taxed if brought to the UK after that date

– Plan and monitor UK residence position under the Statutory Residency Test, as there might not even be a need to declare income and gains if not tax resident.

Important Dates to Note

• October 30, 2024: The Government released a Technical Note titled “Reforming the taxation of non-UK domiciled individuals,” along with draft legislation.
• Autumn 2024 / Early 2025: Parliament will review the draft legislation, with potential (likely minor) amendments possible.
• April 6, 2025: New regime takes effect.
• April 5, 2028: Temporary Repatriation Facility (TRF) ends.

With these significant changes imminent, taking action now is essential for those affected by the abolition of the non-dom regime. Seeking personalised advice can help individuals make the most of the remaining benefits while navigating the complexities of the new tax landscape.