Changes to the Inheritance Tax (IHT) regime for non-doms – Autumn Budget 2024

The previous government announced they would consult on whether they would make changes to the IHT regime and the impact of removing domicile from the tax system. This brought challenges that not only impact the UK, but other jurisdictions.

The measures are to be brought into effect from 6 April 2025 and mean that where an individual has been UK tax resident for 10 of the previous 20 years, their non-UK situs assets will be within the scope of UK IHT. Their position will reset when they have been non-UK tax resident for 10 consecutive years. This aligns with the FIG regime, where the same can be reset.

The government have announced that where an individual has been UK resident for between 10 and 19 years, there will be a shortened period they need to be outside the UK for the position to reset.

For those individuals who are resident between 10 and 13 years, they will remain in scope for 3 tax years after becoming non-UK resident.

For those individuals who are resident for 15 out of 20 years, they will remain in scope of 5 tax years.

For those who are resident for 17 out of 20 years, they will remain in scope for 7 years.

The changes to the remittance basis regime for people termed as ‘non-doms’ brings their non-UK estate within the scope of IHT five years earlier. However, for UK domiciled individuals who have been out of the UK for several years, it brings much welcomed certainty surrounding their estate.

If the Autumn Budget has raised any questions for you, book your place on our question time webinar this Friday at 9:30am. Alternatively, if you would like any further information or guidance on this topic, get in touch with your usual Kreston Reeves contact or contact us here.