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

Budget 2024 – Non-dom

Budget 2024 – Non-dom proposalsContentsSummary ............................................................................................................................ 1Summary of changes for individuals ........................................................................................... 1Summary of changes for trusts ................................................................................................... 1Settlors ................................................................................................................................................................ 1The trust itself ..................................................................................................................................................... 1Beneficiaries ....................................................................................................................................................... 2Timing ................................................................................................................................. 2The proposed changes for individuals ............................................................................ 2The new “4-year FIG regime” ....................................................................................................... 2A high-level comparison of the old and new regimes ......................................................................................... 3Criteria ................................................................................................................................................................ 3Three types of claim under the new regime ....................................................................................................... 4The drawbacks of using the new regime ............................................................................................................ 4How to make a claim for the 4-year FIG regime ................................................................................................. 4Effect of the new regime ..................................................................................................................................... 4Comment ............................................................................................................................................................ 4Rebasing relief .............................................................................................................................. 5The Temporary Repatriation Facility (the “TRF”) ....................................................................... 5Overview of the TRF ........................................................................................................................................... 5The “Personal TRF” in more detail ..................................................................................................................... 6The “Personal TRF”, mixed funds and TRF Capital Accounts ........................................................................... 6The “Trust TRF” in more detail ........................................................................................................................... 7Changes to the remittance basis in relation to existing foreign income and gains ................. 8Inheritance tax (“IHT”).................................................................................................................. 8Comparing the old and new regimes .................................................................................................................. 8The concept of “Long-Term Resident” ................................................................................................................ 9A different rule for those aged 20 and under .................................................................................................... 12Transitional rules for some non-doms .............................................................................................................. 12The impact on gifting ........................................................................................................................................ 12The spouse exemption ..................................................................................................................................... 12Double tax treaties ............................................................................................................................................ 12The changes for trusts .................................................................................................... 12Income tax and capital gains tax in relation to trusts .............................................................. 12The current position .......................................................................................................................................... 12

Budget 2024 – Non-dom proposalsThe changes for settlors ................................................................................................................................... 12The changes for the trustee and any underlying non-UK resident companies ................................................ 13The changes for beneficiaries .......................................................................................................................... 13Comment .......................................................................................................................................................... 13Inheritance tax in relation to trusts ............................................................................................ 14The current position .......................................................................................................................................... 14The changes ..................................................................................................................................................... 14The impact for trusts already in existence as of 30 October 2024 ................................................................... 15The impact for trusts established or funded on or after 30 October 2024 ........................................................ 15Trusts with UK domiciled but non-UK resident settlors .................................................................................... 15Trusts with deceased settlors ........................................................................................................................... 15Qualifying Interest In Possession Trusts (a sub-category of life-interest trusts) .............................................. 15Domicile remains relevant .............................................................................................. 16Other relevant points from the Budget .......................................................................... 16How we can help: ............................................................................................................. 16