Autumn Budget Confirmation
The Autumn Budget confirmed that changes announced by the previous government in the Spring Budget will proceed almost entirely as initially announced. From April 2025, the government will abolish the remittance basis of taxation for non-UK domiciled individuals. They will replace it with a simpler residence-based regime.
Introduction of the 4-Year FIG Regime
The government will introduce a 4-year foreign income and gains (FIG) regime. New arrivals to the UK who opt into the regime will benefit from 100% relief on FIG in their first four years of tax residence. This applies if they have not been UK tax residents in any of the 10 consecutive years before their arrival.
Transitional Measure for Capital Gains Tax
As a transitional measure for Capital Gains Tax purposes, current and past remittance basis users can rebase personally held foreign assets until 5 April 2017. This applies where certain conditions are met.
Extension of Overseas Workday Relief
Overseas Workday Relief will extend to a 4-year period to align with the new 4-year FIG regime. This change removes the need for users to keep their employment income offshore. The amount of Overseas Workday Relief that can be claimed annually will be limited to the lower of £300,000 or 30% of the employee’s net employment income from 6 April 2025.
Introduction of the Temporary Repatriation Facility
A new Temporary Repatriation Facility (TRF) will be introduced from April 2025 for three years. This facility allows individuals to designate and remit foreign income and gains at a reduced rate. This includes unattributed foreign income and gains held within trust structures. The TRF rate will be 12% for the first two years and 15% in the final tax year of operation.
Conclusion
These changes will significantly impact non-UK domiciled individuals. Understanding the new rules and planning accordingly will be crucial for effective tax management. If you need assistance, consider consulting a tax professional to navigate these changes.
