Non-Doms in London: How to Prepare for the Abolition of the Non-Dom Regime in 2025

How UHNW Non-Doms Can Stay Ahead of the 2025 Rule Change

For decades, London has attracted globally mobile individuals through the relative simplicity and predictability of its non-domicile tax regime. For high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs), the remittance basis offered powerful control over when—and if—foreign income and gains were taxed.

That regime is now coming to an end.

In the UK Spring Budget 2024, the Chancellor confirmed that from 6 April 2025, the current non-dom system will be replaced with a residence-based regime. For non-doms living in London, this presents both a challenge and an opportunity—if planning is done proactively.

What’s Changing: From Domicile-Based to Residence-Based Taxation

Under the new rules:

• After four years of UK residence, individuals will be taxed on worldwide income and gains, regardless of domicile

• The remittance basis will end entirely

• Existing protections on foreign assets held in offshore structures may be phased out

• Inheritance tax exposure will expand over time for long-term residents

For many international families who came to the UK for lifestyle, education, or business reasons—often keeping wealth offshore—this reform significantly raises the stakes.

Offshore Bonds: Deferring Tax with Gross Roll-Up

One of the most powerful tools still available is the offshore investment bond. These vehicles provide:

• Gross roll-up – investments grow without triggering annual income or capital gains tax

• 5% cumulative withdrawal allowance – allowing you to draw income for up to 20 years before any tax becomes payable

• Top-slicing relief – potentially reducing the tax liability when gains are eventually crystallised

• Multi-currency flexibility – ideal for those with USD, EUR or globally held assets

• Segmentation – allowing tax-efficient partial encashments

• Portability – ideal for internationally mobile clients

For clients still within their first four UK tax years, or planning to become non-resident again in the near future, offshore bonds can provide significant tax deferral without forfeiting control.

Planning Windows Before April 2025

The next several months are critical for clients who:

• Are approaching the fourth tax year of UK residence

• Are already beyond Year 4 but still have offshore income or gains

• Intend to leave the UK temporarily or permanently

• Hold significant offshore investments or clean capital awaiting deployment

• Want to transfer wealth into long-term, tax-efficient structures

Structuring options before April 2025 may include:

• Establishing offshore bonds for clean capital

• Contributing assets to excluded property trusts (still effective for non-UK domiciled settlors)

• Gifting or settling wealth into Family Investment Companies (FICs)

• Coordinating drawdown timing to align with the remaining remittance basis period (if applicable)

• Rebasing foreign assets for CGT purposes before the new rules apply

These actions are time-sensitive. Some structures may lose effectiveness—or become unavailable—once the new rules are in place.

Inheritance Tax Exposure: The Sleeping Giant

Alongside income and gains taxation, the erosion of non-dom protections will likely lead to full inheritance tax (IHT) exposure for many UHNW families. Currently, foreign-domiciled individuals are only subject to IHT on UK-situs assets.

This is changing.

The proposed new rules will:

• Introduce residence-based IHT exposure, potentially after 10 years

• Retain that exposure for a period after leaving the UK

• Reduce the long-term effectiveness of previous “excluded property” strategies

We advise clients on:

• Trust planning – including timing and structure for excluded property trusts

• Offshore bonds inside trust to retain growth and control

• Whole-of-life insurance to provide liquidity at death

• FICs and other wrappers for managing multigenerational wealth efficiently

• Legacy gifting strategies that use time and exemptions wisely

Beyond Tax: Managing Wealth Across Borders

Our clients are rarely “UK-only.” Most maintain financial ties, family interests, and tax exposures in multiple jurisdictions. We design investment strategies that reflect this, including:

• Multi-jurisdictional reporting and custody

• Asset location optimisation

• Specialist portfolios for non-reporting fund risk or PFIC exposure (for US-connected clients)

• Coordination with family offices, private banks, and trustees

We do not replace your tax adviser or legal team—we work in tandem to ensure that your investment strategy integrates seamlessly with your broader global planning.

A Final Word: Act Now, Strategically

The end of the non-dom regime is not the end of opportunity—but it is the end of passivity. Clients who act now can:

• Secure tax deferral

• Protect assets

• Reduce long-term exposure

• Build flexible, mobile investment frameworks that endure beyond 2025

We provide UK-regulated, discreet financial planning for UHNW international clients based in London, aligned with your goals, and coordinated with your legal and tax team.

📞 Ready to Review Your Strategy Before April 2025?

If you’re a non-dom living in the UK and want to explore your options—whether through offshore bonds, trusts, or family investment structuring—we’re here to help.

👉 Book a confidential consultation with a UK-qualified Chartered Financial Planner

Time is limited. Let’s use it wisely.