Leaving the UK After the Non-Dom Abolition: Your Realistic Options in 2026
A fund manager who spent twelve years in London on the remittance basis watches his 2025/26 return arrive: worldwide income, fully taxable, for the first time in his life. His accountant is excellent and can change nothing, because the problem is no longer accounting. It is geography.
What actually changed
On 6 April 2025 the UK abolished the non-dom regime that had, in one form or another, existed for over two centuries. Three replacements matter:
The 4-year FIG regime
The remittance basis is gone. In its place, the foreign income and gains (FIG) regime gives 100% relief on foreign income and gains, remittable to the UK tax free, but only for the first 4 tax years of UK residence, and only for arrivals who were non-UK resident for the previous 10 consecutive years. Long-term residents get nothing: from year five, worldwide taxation at full UK rates.
The temporary repatriation facility (TRF)
Former remittance basis users can designate previously unremitted foreign income and gains and bring them to the UK at a reduced rate: 12% in 2025/26 and 2026/27, rising to 15% in 2027/28, after which the facility closes. For anyone sitting on old offshore pots, this is a closing window with a hard deadline in April 2028.
Residence-based inheritance tax
IHT no longer follows domicile. From April 2025 you are a "long-term resident" if you were UK resident in at least 10 of the previous 20 tax years, and long-term residents are exposed to UK IHT at 40% on worldwide assets. Crucially, that exposure follows you out of the country: a tail of 3 to 10 years after departure, scaled to how long you were resident, before your non-UK assets fall out of scope. Confirm the tail that applies to your own year count against current law; the design was still being refined in guidance through 2025 and 2026.
Who is actually affected
- Former remittance basis users now paying UK tax on worldwide income, with a TRF window closing in April 2028.
- Long-term foreign residents whose global estates entered the IHT net, including assets held through structures that used to be protected.
- British entrepreneurs and founders who never used the non-dom regime but read the direction of travel and are planning exits around business sales.
- Returning British expats, who, ironically, can now use the FIG regime themselves after 10 years abroad.
Where UK leavers actually go
| Destination | Regime in one line | Fits best |
|---|---|---|
| UAE | No personal income tax; 9% corporate tax above AED 375k; real presence needed for treaty-grade certificates | Active earners and founders who will genuinely relocate |
| Italy | Flat tax on all foreign income for new residents: €300,000 per year for arrivals from January 2026 (€200,000 for pre-2026 movers), up to 15 years | Very high earners who want Europe and certainty |
| Switzerland | Lump-sum taxation based on living expenses, no Swiss employment allowed; minimum annual tax often CHF 250,000 to 300,000 for non-EU nationals, canton dependent | Wealthy families prioritizing stability |
| Monaco | No personal income tax for residents (French nationals excepted); residence requires local accommodation and a substantial bank deposit, commonly quoted around €500,000: confirm against current practice | The very wealthy who can live on the Riviera cost base |
| Cyprus | Non-dom status: no tax on dividends and interest for 17 years; tax residency available with only 60 days of presence if conditions are met | Investors and founders living off dividends |
| Portugal | The old NHR is closed; the successor IFICI regime offers 20% on eligible Portuguese employment and exemptions on most foreign income for qualifying professions: confirm eligibility against current law | Professionals in qualifying scientific and technical roles |
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The statutory residence test (SRT)
UK residence is determined by the SRT, a mechanical test combining days of presence with ties: available accommodation, close family in the UK, substantive work, more than 90 days in either of the two prior years, and (for leavers) more country days in the UK than anywhere else. The more ties you keep, the fewer days you may spend. A leaver with three ties can be caught as resident with as few as 46 days. Plan your UK diary before you book anything.
Split year treatment
In qualifying cases (starting full-time work abroad, ceasing to have a UK home) the departure year is split: UK-taxable up to the departure, non-resident after. The conditions are precise, and missing them means the entire tax year stays taxable. This alone often dictates the best month to move.
Temporary non-residence rules
Leave, realize gains or take certain dividends abroad, and return within 5 years, and the UK taxes much of what you realized while away as if you had never left. Anyone planning a business sale around a UK exit must treat the 5-year clock as a design constraint, not a footnote.
The sequencing mistakes we see most
- Selling before ceasing residence. The disposal lands in a resident year and the planning achieves nothing.
- Leaving without securing the destination. Exiting the UK into visa limbo, with no new residency to show banks or HMRC.
- Ignoring the TRF window. Old remittance basis money left undesignated past April 2028 loses the 12% to 15% rates forever.
- Keeping the London house "just in case." Available accommodation is a tie under the SRT and shortens your safe day count every year.
- Treating IHT as solved on departure. The 3 to 10 year tail keeps the worldwide estate in scope; life cover and timing need to bridge it.
Frequently asked questions
What replaced the UK non-dom regime?
From 6 April 2025 the remittance basis was replaced by the foreign income and gains (FIG) regime: new arrivals who were non-UK resident for the previous 10 years get 100% relief on foreign income and gains for their first 4 tax years. After that, worldwide taxation applies. A temporary repatriation facility lets former remittance basis users bring old money in at 12% in 2025/26 and 2026/27, rising to 15% in 2027/28.
Does leaving the UK end my inheritance tax exposure?
Not immediately. Since April 2025 IHT is residence-based: if you were UK resident in at least 10 of the last 20 tax years you are a long-term resident, and worldwide IHT exposure follows you for a tail of 3 to 10 years after leaving, depending on how long you were resident. The tail is one of the strongest arguments for leaving sooner rather than later.
Can I keep visiting the UK after I leave?
Yes, within the day counts the statutory residence test allows for your combination of ties. Each tie you keep (available accommodation, close family, substantive work, past presence) lowers the number of days you can spend without becoming resident again. Serious leavers plan their UK diary as carefully as their new country's.
What is the biggest mistake UK leavers make?
Realizing gains or taking dividends in the wrong tax year. Sell before you have properly ceased UK residence and the gain is fully taxable; return within 5 years and the temporary non-residence rules can tax what you realized while away. Sequencing the departure, the disposals and the arrival is most of the value of professional advice.
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