The UK’s proposals for non-doms and their structures (as of 10 March 2025)

The UK’s new tax

The UK’s new tax regime for internationally connected individuals and their structures (as of 25 June 2025)The length of the tail period depends on a combination of factors but can be summarised in most casesusing the flow chart below:START HEREWas the individual domiciled outsideof the UK on 30 October 2024?YesDid they become non-UK res in2022/23 or earlier?YesNo tailNoNoHow many tax years were they taxresident in the UK in the 20 taxyears preceding their first year ofnon-UK residence?NoDid they become non-UK res in2023/24 – 2025/26?AnswerTail lengthYes9 or fewer No tail10-13 3 tax yearsWere they tax resident in the UKfor 15 or more of the 20 taxyears preceding their first year ofnon-UK residence?NoNo tail14 4 tax years15 5 tax yearsYes3 tax years16 6 tax years17 7 tax years18 8 tax years19 9 tax years20 10 tax years12

The UK’s new tax regime for internationally connected individuals and their structures (as of 25 June 2025)Two visual examples of how the tail operates in practice are shown below:= tax year of UK residence= tax year of non-residenceSatisfies the 10/20 testto become“Long-Term Resident”Ceases to beUK tax residentCeases to be“Long-Term Resident”Taxyears10/20 years of UK tax residence 11 12 1 2 34 onwardsIHTexposureIHT only on UK assetsIHT on worldwide assetsIHT only on UKassetsSatisfies the 10/20 testto become“Long-Term Resident”Ceases to beUK tax residentCeases to be“Long-Term Resident”Taxyears10/20 years of UKtax residence11 1213 14 14 15 1 2 3 4 56 onwardsIHTexposureIHT only on UKassetsIHT on worldwide assetsIHT onlyon UKassetsA different rule for those aged 20 and underIf the 10/20 test applied to everyone then many children who have only ever lived in the UK would not satisfyit, e.g. a 9 year old would not yet have accrued 10 years of UK tax residence.To address this issue, those aged 20 or younger are Long-Term Resident if they have been UK resident forat least 50% of the tax years since their birth.A child under the age of 1 will not be Long-Term Resident in the tax year of their birth even if born in the UK.Transitional rules for some non-domsWhen the IHT changes were first announced there was a concern that individuals who had ceased to beexposed to IHT on their worldwide estates under the previous domicile based tests would be pulled back intothe IHT net by the new regime.There is a transitional rule for those who would otherwise be in this position and this is why the flow chartabove begins by asking whether the individual was domiciled outside of the UK on 30 October 2024.13