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.
Background
Prior to 6 April 2008, individuals who were UK resident and non-UK domiciled (RND) could benefit from offshore trusts without incurring any liability to UK Capital gains tax (CGT). This was the case even if the benefit was received in or enjoyed in the UK.
The Finance
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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Rebasing election definition
What does Rebasing election mean?
An election by trustees under which provides a relief to beneficiaries who are resident but not domiciled in the UK, in the event they receive a capital payment from the trust which is matched with trust gains which are realised after 6 April 2008, but part or all of which accrued before 6 April 2008.
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