Since 6 April 2025 the UK taxes people with international ties by residence, not domicile. New arrivals can claim relief on most foreign income and gains for their first four tax years of UK residence; after that, worldwide income and gains are taxed here, and worldwide inheritance tax depends on whether you are a long-term UK resident.
Foreign income and gains
The remittance basis has been abolished. Instead, new UK residents who have not been UK resident in any of the previous ten tax years can claim relief on most foreign income and gains for up to their first four tax years of residence. The claim is made on a Self Assessment return, does not cover foreign employment income (which has its own relief, overseas workday relief, for the same four years, capped at the lower of £300,000 and 30% of that income), and costs you your personal allowance and capital gains tax annual exempt amount for that year. After that, worldwide income and gains are taxed in the UK in the normal way.
Inheritance tax
Inheritance tax on worldwide assets now depends on long-term residence: broadly, being UK resident for at least ten of the previous twenty tax years. Exposure can continue for a period after you leave, depending on how long you were resident.
Transitional rules
People who used the old regime may benefit from transitional arrangements, including the temporary repatriation facility, which taxes designated foreign income and gains from before 6 April 2025 at 12% in 2025/26 and 2026/27 and 15% in 2027/28, and a one-off rebasing of foreign assets to 5 April 2017 for some past remittance basis users. The details depend closely on individual facts.
What to do now
- If you are arriving: plan before you land, and decide whether to claim the four-year relief.
- If you have been here some time: check where you stand on the long-term residence test for inheritance tax.
- If you set up or benefit from an offshore trust: the old protections for trusts set up by non-domiciled settlors ended on 6 April 2025, so trust income and gains can now be taxed on you, and the trust's inheritance tax position follows your long-term residence status.
- If you are leaving: understand which UK ties still count and how long any inheritance tax exposure lasts.
Our international tax service covers arrivals and departures. See also UK landlords living abroad and your will and inheritance tax. To review your own position, book a consultation.
This article is general information about UK tax, based on the law and HMRC practice at the date shown above. It is not advice, and reading it does not make you our client. Tax rules change and their effect depends on your circumstances, so please speak to us before acting on it.