UK tax: Critical things you need to know following the recent changes (Beijing).

The Labour Government has made radical changes to the UK tax system that affect both non-domiciles and domiciles living abroad or in the UK. These changes create opportunities for some but present significant pitfalls for others. The old system had been in place for centuries and helped the UK become a magnet for high-net-worth individuals and investors.

The benefits of non-domicile status had reduced in recent years, but the concept has now been consigned to history. This benefits some while costing many, leading thousands of people to review their UK tax position on income, property, and investments, as well as their residency and tax status. Many are leaving for more favourable tax jurisdictions.

Opportunities and pitfalls from the UK’s new personal tax regime

• A new residence-based Foreign Income and Gains (FIG) regime was introduced on 6 April 2025. This changes how and when people are taxed, regardless of nationality or domicile. It introduces a 10+ year rule and specifies a number of tax residency years within this period.
• Worldwide Inheritance Tax (IHT) will only apply to long-term residents (over 10 years). This creates opportunities for overseas-based UK domiciles to restructure their investments, but poses challenges for those entering the country.
• Long-standing relief from IHT for trading and farming businesses will be restricted from 6 April 2026, further reducing the UK’s attraction for investors.
• The Statutory Residence Test and the four-year window of opportunity have become critically important to monitor.
• A UK Budget announcement is planned for 26 November, which may bring additional changes.

The current political and fiscal position is hugely challenging. The November Budget will very likely bring further significant changes. Higher taxes seem certain, but it is unclear where the burden will fall.

It is critically important for anyone in the UK as a non-domicile, any UK domicile person living abroad, or anyone who visits the UK regularly to review their tax position. Failure to do so could lead to significant future tax liabilities. Others may become exempt from IHT if they stay within allowable boundaries. UK nationals or foreign nationals planning to move to the UK in the future need to plan in advance to reduce future tax burdens.

Speakers

• Russell Brown OBE: Vice Chairman, Partner, Acclime
• Alastair McQuater: Partner, Corporate Tax, Buzzacott