On 6 April 2025, more than 200 years of UK tax law were consigned to history, as the Resident Non-Domicile (RND) regime – which conferred tax advantages for so-called ‘non-doms’ – was abolished and replaced with a new Foreign Income and Gains (FIG) regime. For now-former UK non-doms, and individuals planning to relocate to the UK, the introduction of the new rules has been seismic.
For now-former UK non-doms, and individuals planning to relocate to the UK, the introduction of the new rules has been seismic
At the 4th Annual Non-Dom Tax and FIG Forum, private client tax, legal, and wealth management experts gathered to explore what the changes mean for high-net-worth individuals (HNWIs) who had benefitted under the old rules, the pitfalls to be avoided, and the best wealth structuring approaches for those who move to or remain in the UK.
The conference, which was co-sponsored by Lombard Odier, was the first to be held since the new rules had come into effect – rules which, delegates heard, form the most dramatic change to the UK private client landscape in a generation.
What’s changed?
A panel including Jennifer Springett, Head of Wealth Planning UK at Lombard Odier; Rosie Todd, Partner and Head of Tax and Trusts at Stevens & Bolton; Sean Bannister, Partner and Head of Tax at Edwin Coe; and Alasdair Wilson, Partner at Harbottle & Lewis, began by outlining the biggest changes effected by the new rules.
Delegates heard that the headline reform is the scrapping of the remittance basis, meaning UK residents are now subject to tax on their worldwide income and gains unless they can benefit from the new FIG regime. Inheritance tax (IHT) has also undergone a major shake-up, moving from a domicile-based to a residence-based system – individuals who have been resident in the UK for at least 10 out of the previous 20 tax years will be subject to IHT on their worldwide assets. Trusts have also been impacted, the panel explained, with the end of protected settlement status, meaning that in many cases UK resident settlors will now be assessed personally on income and gains within a trust structure.
UK residents are now subject to tax on their worldwide income and gains unless they can benefit from the new FIG regime
The panel noted that the FIG regime enables ‘Qualifying New Residents’ (QNRs), which are those individuals who have been non-UK resident for 10 consecutive tax years before their arrival in the UK, to take advantage of a four-year grace period, during which most categories of foreign income and gains are exempt from UK tax and can be brought into the UK freely. However, any former non-doms will need to continue to keep offshore income and gains earned on the remittance basis outside of the UK as the old remittance basis rules will continue to apply to these funds, unless they choose to use the Temporary Repatriation Facility (TRF) which runs for 3 years until 5 April 2028, enabling a reduced tax rate to be paid and funds remitted without further charge to tax.
Read also: Understanding the UK’s Foreign Income and Gains (FIG) regime
The early impact
The early impact has been dramatic, the panel said. Advisors have seen a surge in their workload, and some have seen clients choose to leave the UK, with Dubai, Switzerland and Italy all being popular destinations.
However, the conference heard that many clients have chosen to stay, opting to restructure their wealth under the new regime.
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serving former UK resident non-domiciled (RND) clients.
learn more While many HNWIs have left the UK, advisors are also seeing a number of new arrivals. Lombard Odier’s Jennifer Springett noted, “for anyone coming to the UK who’s going to be claiming FIG for the first time, the new rules introduce a positive element, which is that their banking setup will be more straightforward – they don’t need a complex set of segregated bank accounts as was the case under the remittance basis. However, those who were in the UK already on the remittance basis, and are now on the FIG regime or the arising basis, will have two sets of tax rules that they need to consider, and that requires careful management.”
For anyone coming to the UK who’s going to be claiming FIG for the first time, the new rules introduce a positive element, which is that their banking setup will be more straightforward
Potential pitfalls and increased compliance costs
The panel agreed that former non-doms now have the added complexity of navigating two sets of rules as they get to grips with the new regime. It will be very important for anyone moving to the UK to review their sources of income and gains to understand which qualify for relief from tax under the FIG regime and which won’t. It’s also crucial to review any structures to understand their tax treatment in the UK, both during the FIG period and beyond.
They also warned that the FIG regime comes with extra layers of compliance and disclosure requirements, creating a potential pitfall for clients who must now declare all foreign income and gains, even those not taxed. As a result, accountants will play a larger role in analysing and reporting income, gains and deductions, and compliance costs will inevitably rise.
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understanding the UK’s Foreign Income and Gains (FIG) regime.
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learn more Jennifer Springett noted that a seemingly simple but crucial trap to avoid is getting your timing wrong. “clients will need to take care to not accidentally become UK resident near the end of the tax year, because then you won’t get a full four years to benefit from the FIG regime. It’s also important to remember that once you’ve been resident for at least ten out of the last twenty tax years you’ll be a ‘Long Term Resident’ and within the scope of IHT. If you don’t want to fall within that net you must leave in year nine, not year ten. That’s absolutely fundamental.”
The FIG regime comes with extra layers of compliance and disclosure requirements, creating a potential pitfall for clients who must now declare all foreign income and gains
Structuring investments in the new era
The conference later heard from David Barker, Senior Wealth Planner at Lombard Odier; Emily Osborne, Partner at Fladgate; David Kilshaw, Head of Private Client Wealth Solutions at Rothschild & Co; and Blane Queripel, Director at CSC Global, who together turned to the practical question of how best to structure investments in this new era.
The panel explained that the abolition of the remittance basis has already created a new approach to investment structuring, with clients now opting for different types of investments and investment structures. In particular, the panel expressed that 2025 may be shaping up to be “the year of the wrapper”.
In the new era, the choice of wrapper has become much more important than before. Lombard Odier’s David Barker explained: “It’s essential to understand the client’s objectives – whether it’s tax efficiency or succession planning. Different wrappers have different purposes and some of them also have specific investment restrictions, so making sure, firstly, that the chosen wrapper meets the client’s objectives and, secondly, that the investment restrictions don’t cut across the client’s investment strategy are key.”
Following the loss of the protections provided by offshore trusts, Protected Cell Companies (PCCs) (and similar arrangements which facilitate portfolio growth by deferring Capital Gains Tax until redemption of shares in the cell or sub-fund) are receiving renewed interest. Family Investment Companies (FICs) – “which some regard as effectively a trust substitute” – continue to be popular with some clients as a long term succession planning vehicle. However, for many clients seeking to shelter income and gains for a limited period of continued UK tax residence, offshore life bonds have jumped to the top of the list. David Barker expanded: “Over the course of my career I’ve only occasionally seen clients using offshore life bond wrappers, but now they seem to be taking them up with much more alacrity. The reason is that former non-doms who have lost the ability to use the remittance basis are looking for a wrapper that’s temporary in nature, that they can use until they relocate.”
Timing and technical complexity
The popularity of offshore life bonds reflects a growing trend – clients are increasingly seeking only temporary investment vehicles to optimise their tax position until they move away.
For advisors, this shorter-term outlook adds another complexity. The timing and sequencing of investments, and a thorough understanding of income and gains attribution rules, are now all the more essential, the panel explained.
For many clients seeking to shelter income and gains for a limited period of continued UK tax residence, offshore life bonds have jumped to the top of the list
Wide-ranging changes demand broad expertise
The new FIG regime marks a decisive shift in UK tax policy – for HNWIs and their advisors, it introduces wide-ranging implications for planning, compliance and structuring.
Even some of the ‘simpler’ elements – such as the four-year grace period – are less simple than they might first appear. The panel explained that the four-year exemption applies in a more limited and nuanced way than the previous remittance rules, with qualifying foreign income more narrowly defined, and new limitations on partnership profits and employment income relief. Jennifer Springett noted, “It’s really important for anybody looking to claim the FIG regime to understand what their sources of income and gains are, and what’s going to be eligible and what isn’t. But we also need to think about cross-border aspects – it’s really important to understand potential mismatches between the UK tax treatment and foreign jurisdictions.”
While it is true, the conference heard, that some HNWIs have left the UK as a result of the abolition of the remittance basis, or are planning to do so, many are choosing instead to adapt to the new rules. Throughout the day, it became clear that the UK is home to strong technical expertise, and that the private client advisory community has been quick off the mark to understand the requirements of the new system and optimise clients’ wealth structuring and succession planning.
Some HNWIs have left the UK as a result of the abolition of the remittance basis, or are planning to do so, many are choosing instead to adapt to the new rules
At Lombard Odier, we are closely engaged in this evolving environment, driven by a clear mission: to preserve and grow our clients’ wealth over the long term. With more than 50 years of presence in London and deep cross-border expertise, our teams of private bankers and investment specialists and wealth planners are well placed to help you navigate the complexities of relocation to or from the UK. In line with our philosophy – “rethink everything®” – we can help you reassess your wealth, succession and tax planning to meet the demands of the UK’s new tax landscape.
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