The Non-Dom Regime has now been Swept Away - a Brief Overview of the Options

The Chancellor, Rachel Reeves', hotly anticipated budget has, as some commentators expected, removed the remittance basis tax payer status also known as the non-dom tax regime. In its place the Chancellor is introducing a residence-based scheme aimed to provide incentives to wealthy foreign nationals to relocate to the UK temporarily. Many wealth advisors and financial experts are of the opinion that this move is a misstep and will have far wider impact. The non-dom tax status and the concept of domicile will be removed from the tax system in April 2025. The term non-dom relates to a resident in the UK whose permanent domicile is outside the UK who pays tax on the income generated in the UK and not on any other income generated abroad unless the money is paid into a UK bank account. It is not connected to their nationality or citizenship.

Rachel Reeves said in her statement to the House “I have always said that if you make Britain your home, you should pay your tax here. So today, I can confirm, we will abolish the non-dom tax regime and remove the outdated concept of domicile from the tax system from April 2025,” 

Vincenzo Senatore, Senior Partner, commented “The changes the Chancellor has introduced today in respect of the non-dom regime were, to some degree, expected. I would advise individuals affected to think carefully about their next steps and review all the options available well before April next year.” Vincenzo further commented, “I would strongly advise any person who has now lost this status to consider global options not just those related to the UK.”

The budget introduces the foreign income and gains (“FIG”) regime and is open to individuals who choose to become tax resident in the UK following a period of ten years of absence from the UK. Those individuals that qualify will not pay tax on FIG in respect of income generated in the first four years of residency. Any income brought to the UK for these purposes will not attract any additional charges. However, any individuals who have been tax resident for less than four years on 6 April 2025 following ten years of non-UK tax residence, will be permitted to access the new regime for tax years of residence in the remainder of the four years. 

Those individuals who change their status from the non-dom regime on 6 April 2025 and do not qualify for the new FIG four-year regime, will, for the duration 2025-2026, only pay tax on 50% of their foreign income. The reduction only applies to foreign generated income and not chargeable gains. Thereafter from 2026-2027 tax will be chargeable on all worldwide income in the customary way.

Giambrone and Partners and our panel of trusted advisors can assist individuals in all aspects of wealth management.

Vincenzo Senatore is a triple qualified Italian Avvocato (with Higher Rights of Audience) and admitted as Solicitor in England and Wales and in the Republic of Ireland, np. and also qualified to plead before the International Criminal Court in The Hague.

Vincenzo has several years of post-qualification experience in Civil and Common law. Vincenzo has broad experience of UK and international cross-border transactions across a variety of industry sectors as well as international corporate and criminal law. Vincenzo is a formidable litigator with a demonstrable history of bringing successful transactions to successful conclusions, providing legal support to partners and delivering strategic advice to diverse clientele.

Vincenzo has worked in the USA where, during his fellowship at the prestigious Stanford Centre for Biomedical and Ethics (Stanford University), specialised in intellectual property related to human embryonic stem cells. His research was published in the prestigious peer-reviewed scientific journal Nature Biotech. During that time, he passed the first test (MPRE) to become a California attorney and also became Notary Public for the State of California.

Vincenzo’s professional activities have encompassed, amongst others, being on the scientific organiser committee for the Association Internationale des Jeunes Avocats for conferences on Anglo-American Law and as speaker in webinars, lectures and conferences organised by the British Chamber of Commerce (IT), CUA, Columbus School of Law, Washington DC (USA), Lockey Stem Cells Building Research, Stanford University (USA), SKKU School of Business (Republic of Korea), and the Naples Bar Associations, as expert in Civil and Common law arena.

Vincenzo has been recently appointed to the CUA, Columbus School of Law’s Alumni Council, Washington, DC. The prestigious Alumni Council forms the governing body of Catholic Law Alumni Association, formed in 2013 to endorse and advance the values, objectives, and well-being of The Catholic University of America and Columbus School of Law. He is also a member of the International Criminal Court Bar Association, the Law Society of England and Wales, the Naples Bar Association, and of the International Academy of Financial Consumers (Korea) where he is also editorial member.

Vincenzo Senatore is to date the only Italian lawyer registered in the List of Professionals of the Italian Embassy in Tokyo and the Italian General Consulate in Osaka. Vincenzo heads the Giambrone's Japanese Desk in Italy and the Firm's offices both in Tokyo and Osaka, through the Strategic Alliances with Kikkawa Law Offices and Meilin International Law Firm.

Vincenzo regularly represents large and medium-sized Italian and Japanese enterprises in operations in both countries as well as private clients and entrepreneurs doing business with Japanese companies. His expertise includes a range of cross-border transactions, including M&A, joint ventures, opening branches and subsidiaries, and setting up companies in foreign countries, assisting clients to meet their outcomes.

If you will be affected by the changes introduced in the Budget and would like to be advised as to the options available please click here.