Overview of the changes to the non-dom regime – Autumn Budget 2024

When I authored my last article on this subject in March, the previous government announced wholesale changes to the fabled ‘non-dom’ regime. At the time of the previous announcement, detail was short. However, the current government in their Autumn Budget has gone one step further and provided the draft Finance Bill. We can now see the full impact of these new rules.

Abolition of the Remittance Basis Regime

As expected, the remittance basis regime will be abolished from 6 April 2025 and will be replaced by the new Foreign Income & Gains Regime (FIG).

Temporary Repatriation Facility (TRF)

In the Spring it was announced that individuals who have funds offshore, that have previously been protected by the remittance basis, could remit these funds to the UK in two tax years (2026 and 2027) at a tax rate of 12%. In this Budget it has been announced this facility will be extended to the tax year ended 5 April 2028 and that an increased rate of 15% will apply to that one year.

Changes to the Inheritance Tax (IHT) regime

Under current rules, a non-domiciled individual is not subject to IHT on their non-UK situs assets. However, further to the previously announced consultation, the government has announced that from 6 April 2025, IHT will be a residency-based test. If an individual has been UK tax resident for at least 10 of the previous 20 tax years immediately preceding the tax year in which the event arises, the worldwide assets will be within the scope of UK IHT.

These new rules will create challenges for clients, advisers, and software providers in their own ways. However, there is also opportunity to be gained for those individuals who have been outside the UK for a long time (10 plus years), those in their first four years of residency, and those who have funds tied up overseas they have not been able to access.

Between now and 6 April is the right time to speak with your adviser on what opportunities are available to you.

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.