STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime

Finance Act 2025 (FA 2025) which received Royal Assent on 20 March 2025, implements legislation to abolish the Remittance basis of taxation and replace it with a residence-based regime, commencing on 6 April 2025. FA 2025 also replaces domicile as the key factor in establishing liability to Inheritance tax. Other changes include amendment of the rules determining excluded property status, the abolition of protected settlements status of offshore trusts, and changes to overseas workday relief.

For information on these changes, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025.

The concepts of domicile and residence are used to establish the extent of an individual’s liability to UK taxation. Specifically, domicile determines an individual’s liability to UK inheritance tax (IHT) on foreign situs assets and is a key factor in establishing whether the remittance basis could be applicable to the