How will Non-Dom status change in 2025? 

If you’re living in the UK but still call another place home, you might qualify for Non-Dom status – a potential game changer for your tax situation. But like most good things, it comes with some fine print, and 2025 will bring significant changes. 👋

In this guide, we’ll break down everything you need to know about Non-Dom status, how to get it, how long you can keep it, and what’s changing in April of this year. Let’s dive in!

What’s a Non-dom? 

A Non-Dom (short for Non-Domiciled) is someone who resides in the UK but considers their permanent home or domicile outside the UK for tax purposes. This is often based on the country your father, or mother if unmarried, considered their permanent home when you were born. 

Being a Non-Dom comes with some attractive tax benefits. You only pay tax on what you earn in the UK, not on income from abroad, unless, of course, you bring that money into a UK bank account.

However, it’s not all plain sailing. There are strict rules to follow, and if you’ve been in the UK long enough, you could lose your Non-Dom status and start paying tax on your worldwide income. ⚠️

How to get Non-dom status? 

Wondering how to snag Non-Dom tax status in the UK? It’s all about your domicile (a.k.a. where you consider your permanent home). Here’s what HMRC looks for:

• Your domicile is outside the UK: your permanent home or long-term ties must be in another country.
• You reside in the UK: you can live here for up to 183 days within a tax year, but your “real home” must remain elsewhere. 🏠
• You can prove your foreign ties: this could include bank accounts, TV subscriptions, or the presence of your spouse.

If you can tick these boxes you’ll be well on your way to securing Non-Dom status in the UK. ✅

How long can a Non-dom stay in the UK?

The short answer? Not forever. While Non-Dom status UK offers great tax benefits, it’s not meant to be a permanent arrangement. HMRC keeps a close eye on how long you’ve been in the UK to determine if you’re still eligible. 📅

Here’s the deal: if you’ve been a UK resident for 15 out of the last 20 tax years, you’ll lose your Non-Dom tax status and be “deemed domiciled.” This means you’ll start paying tax on your worldwide income and gains, just like a regular UK resident.

And just so you know, “residence” doesn’t mean living here full-time. Spending just 183 days or more in the UK within a tax year is enough to make you a UK resident for tax purposes.

What’s changing in 2025?

Big changes are coming in 2025! The UK government is planning to phase out the current Non-Dom system, which could shake up your tax situation. 😬

Under the current plans, anyone who moves to the UK from April 2025 can no longer claim Non-Dom status. For the first four years, they’ll be able to keep their foreign earnings outside the UK tax system. But after that? Well, if they continue living in the UK, they’ll pay tax just like everyone else on their worldwide income.

For those already holding Non-Dom status UK, there’s a bit more time. A two-year transition period will allow individuals to bring their foreign wealth into the UK tax system.

Who will be affected?

The 2025 changes to Non-Dom tax status will impact different groups in various ways. Here’s a quick breakdown: 

• New arrivals from April 2025: anyone moving to the UK from April 2025 won’t be able to claim Non-Dom status. They’ll be taxed on their worldwide income after the first four years, just like UK residents. 🌎
• Current Non-Doms: already a Non-Dom? No need to panic – you’ve got until 2025 to enjoy the perks. After that, you’ll have a two-year transition period to bring your foreign wealth into the UK tax system.
• High earners with foreign income: individuals with large foreign earnings, such as pensions or rental income, could face a higher tax burden if they can no longer shield their overseas income under the current Non-Dom tax rules.
• Inheritance beneficiaries: if you’re set to inherit, keep in mind that foreign income and assets will also become part of the UK inheritance tax system for long-term UK residents.

In a nutshell

Non-Dom status can be a smart way to manage your taxes in the UK, but with changes coming in 2025, it’s important to stay on top of the rules. Whether you’re securing your status or figuring out how the new rules affect you, we’re here to help make things clearer!