UK Non-Dom Abolished: What You Need to Do Before 2028

What Changed on April 6, 2025

The UK formally abolished the non-domicile (non-dom) tax regime on April 6, 2025, ending a system that had allowed foreign-domiciled residents to exclude overseas income and gains from UK taxation for decades. The abolition was announced in the March 2024 Budget and passed into law despite significant lobbying from the financial services industry.

The immediate effect was the largest millionaire exodus in UK recorded history: 16,500 net millionaire outflows in 2025 alone, according to Henley & Partners. Seventy-eight centi-millionaires and twelve billionaires departed. The Adam Smith Institute projects the policy will cost the UK economy £6.5 billion by 2035.

The 4-Year FIG Regime

The replacement framework is the Foreign Income and Gains (FIG) regime. New arrivals to the UK can elect to pay no UK tax on foreign income and gains for their first four years of tax residence. After four years, worldwide income and gains become fully taxable at standard UK rates.

The FIG regime is available only to individuals who have not been UK tax resident in any of the ten years preceding arrival. This makes it relevant for returning expatriates and new immigrants — but not for long-term non-doms who have already exhausted their eligibility.

The 10-Year IHT Tail

The most significant change for departing HNWIs is the inheritance tax (IHT) tail. Long-term UK residents who leave the country remain subject to 40% IHT on worldwide assets for ten years after departure. This applies regardless of domicile status and represents a fundamental shift from the previous regime where departure typically ended IHT exposure.

Assets held in trust structures, offshore companies, and foreign real estate are all potentially within scope. Planning must begin before departure, not after.

The TRF Window — Act Before 2028

The Temporary Repatriation Facility (TRF) allows former non-doms to bring previously untaxed foreign income and gains into the UK at a reduced rate of 12% during the 2025/26 and 2026/27 tax years only. From 2027/28, the rate rises to 15%. After April 2028, the TRF closes entirely.

If you have accumulated offshore wealth under the old non-dom regime, the TRF window is your last opportunity to regularize at a preferential rate. Missing this deadline means either leaving funds offshore indefinitely or repatriating at full UK tax rates.

The Three Most Common Exit Destinations

United Arab Emirates

The UAE recorded +9,800 net millionaire inflows in 2025 — the highest of any country globally. Zero personal income tax, the Golden Visa program, and world-class infrastructure make Dubai and Abu Dhabi the default choice for departing UK HNWIs. Genuine relocation requires breaking UK tax residence, which means spending fewer than 183 days in the UK and severing ties including property, employment, and family connections.

Switzerland

Switzerland offers lump-sum taxation arrangements in several cantons, allowing HNWIs to negotiate a fixed annual tax payment based on living expenses rather than worldwide income. Zurich, Zug, and Geneva remain the primary destinations. Processing for residence permits typically takes 3–6 months.

Italy

Italy's flat-tax regime for new residents allows HNWIs to pay €200,000 per year on all foreign-source income regardless of amount. Combined with the Italian lifestyle premium and EU access, Italy has attracted +5,200 net millionaire inflows in 2025. The regime requires genuine relocation and is available for up to 15 years.

What "Genuine Residency" Means

HMRC actively challenges individuals who claim non-residence while maintaining UK ties. The Statutory Residence Test (SRT) determines tax residence based on days spent in the UK and connecting factors including a UK home, family, and employment.

To successfully exit the UK tax net you must: spend fewer than 183 days in the UK in the departure year, reduce UK ties below the SRT thresholds, establish genuine residence in your destination country, and document the break comprehensively.

Departing the UK is not a paperwork exercise. HMRC's Connect system cross-references flight data, property records, and financial transactions. Your exit must be real, documented, and defensible.

Steps to Take in Order

1. **Commission a tax residency review** with a qualified cross-border advisor before making any moves.
2. **Map your IHT exposure** across all worldwide assets including trusts and offshore structures.
3. **Evaluate the TRF window** if you have untaxed offshore gains to repatriate — deadline is April 2028.
4. **Select and establish genuine residence** in your destination jurisdiction before the next UK tax year begins.
5. **Document everything** — flight records, utility bills, lease agreements, and local tax registrations in your new country.
6. **Notify HMRC** of your departure using the appropriate forms and retain all correspondence.
7. **Restructure remaining UK assets** to minimize ongoing exposure during the ten-year IHT tail period.