The Budget that ended non-dom status: what happened, and what came next?

At the Autumn Budget on 30 October 2024, Chancellor Rachel Reeves announced the abolition of the UK’s non-domicile regime, telling Parliament: “I have always said that if you make Britain your home, you should pay your tax here.” The Treasury estimated the change would raise £12.7 billion over five years.

Reeves confirmed the UK would move to a residence-based system, replacing domicile as the connecting factor for tax with a new foreign income and gains (FIG) regime offering “internationally competitive arrangements” for those arriving in the UK on a temporary basis

What the Budget announced

Individuals who had not been UK resident in any of the 10 consecutive tax years before their arrival would, for their first four years of UK residency, pay no UK tax on foreign income and gains arising in that period. This became known as the 4-year FIG rule.

Non-domiciled individuals already using the remittance basis were told to expect a Temporary Repatriation Facility (TRF), allowing them to bring pre-6 April 2025 foreign income and gains into the UK after that date at a reduced rate, for a limited period.

Those who had previously used the remittance basis would move to the arising basis from 6 April 2025, and so become taxable on worldwide income and gains, except where the new 4-year FIG rule applied.

The Budget also set out a shift from a domicile-based to a residence-based Inheritance Tax (IHT) system from 6 April 2025, based on whether an individual, or the settlor of a trust, counted as a UK ‘long-term resident’.

How the proposals developed

The government published amendments to the Finance Bill 2024/25 covering the detail of the non-dom reforms. These were debated and passed at report stage on 3 March 2025. The report stage amendments addressed concerns that money held in non-UK bank accounts could trigger inadvertent remittances, though the wider extension to the definition of ‘remitted to the UK’ remained a point of concern for advisers at the time. Technical amendments were also made to the treatment of trusts, intended to make the trust pooling provisions work as intended.

The wider package confirmed at this stage included the end of the remittance basis for all UK-resident individuals from 6 April 2025, the 4-year FIG regime, the TRF, some rebasing of capital gains to align with the new system, and the retention of Overseas Workday Relief, aligned to the same 4-year window as the FIG regime.

What happened when the changes took effect

The reforms took effect on 6 April 2025 as announced, and have applied since. For how the FIG regime, the TRF, residence-based IHT and the related reliefs work under the current rules, see our non-domicile tax advice page.

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