From 6 April 2025, the historical regime for Resident Non-Domiciled (RND) individuals will no longer apply. It will be replaced by the Foreign Income and Gains (FIG) regime, which is based on residence, rather than by domicile.
In short, new arrivals to the UK can benefit from a four-year period, in which any foreign income or gains earned, will not be taxable in the UK. Whilst this is a shorter period than the previous remittance basis regime, a notable benefit is that those funds can then be brought into the UK without any additional UK tax being applied. For those that have historically used the remittance basis regime, there is the potential to use a Temporary Repatriation Facility (TRF). The TRF allows for historic untaxed income or gains to be “designated”, have a fixed rate of tax applied and therefore clear them for UK remittance without additional UK taxation.
Other impacts of the changes relate to how inheritance tax (IHT) will now apply. With the removal of domicile as the determiner of an individual’s status and residence being the important factor, when someone is or isn’t subject to UK IHT on a global basis may become clearer. However, with a global UK IHT remaining in place even up to 10 years after leaving the UK, temporary UK residents will want to pay extra attention to their residency status in the UK, as it could have a lasting impact long after they leave.
Please refer to our Introduction to the Foreign Income and Gains (FIG) Regime for further details about the new rules and the considerations that may impact you.
The new rules will impact both existing and new arrivals to the UK and may affect existing financial planning in place. Individuals previously considered non-domiciled should review their historical advice and plans, so that they can make any amendments as required.
The International team at Partners Wealth Management has been dealing with the concepts of domicile, remittance, mixed funds, and participated in consultations about the new regime with HMRC. We also have worked with a vast number of lawyers and accountants, along with other professional advisers in order to advise our clients about their family wealth.
We are used to working with cross border and complex situations utilising strong methodology, vast professional network and in-depth knowledge of available products and strategies. Please contact a member of our team if you have queries about how you might be impacted or for advice on planning for your future.
From 6 April 2025 the new Foreign Income and Gains (FIG) Regime will be introduced, replacing the previous system based on domicile. Our guide outlines the new rules applicable to both existing and new UK residents.
The concept of residence will be a key consideration for any individual moving to or from the UK, as it has a fundamental impact on a person’s potential tax liability. Our guide considers some of the key questions we have been asked by clients in this area.
Every year a significant number of UK nationals who have expatriated abroad return to the UK. This will be for many different reasons but one thing everyone has in common is, just as you will have considered your financial position before you left, you need to do so again before you return.
For further information on how we can help you build and protect your wealth, please contact us.
