Taxation: Domicil

The Government has removed the outdated concept of domicile states from the tax system and implemented a new residence-based regime from 6 April 2025. The new residence-based regime is more compatible for new arrivals than the previous rules.

The Government published a Tax Information and Impact Note for this policy on 30 October. This can be found here: https://www.gov.uk/government/publications/tax-changes-for-non-uk-domiciled-individuals/reforming-the-taxation-of-non-uk-domiciled-individuals.

There have always been relatively large flows of non-doms in and out of the UK every year. The latest HMRC statistics can be found here: https://www.gov.uk/government/statistics/statistics-on-non-domiciled-taxpayers-in-the-uk/statistical-commentary-on-non-domiciled-taxpayers-in-the-uk--2. These show the number of non-domiciled taxpayers in each tax year up to 2023/24.

We anticipate that some non-doms ineligible for the new regime will exit the UK in response to the changes. Taking this migration response into account, the OBR expects the non-dom reforms to raise £33.8 billion over the next five years to help fund the public services and investment projects needed to drive growth.