The End of UK Non-Dom Status: Key Change and Implications for Tax and Residency
What is Non-Dom Status?
Distinction between Domicile and Residency
In order to better understand Non-Dom Status, one must first distinguish between the concepts of ‘Residency’ and ‘Domicile’. Residency refers to the country where a person is currently living or residing. On the other hand, Domicile usually refers to one’s home country or the country which they consider their real home, even if they are currently residing in another country.
Defining Non-Dom Status
Non-Dom Status, short for Non-Domiciled Status, is a special tax status in the United Kingdom. It applies to persons who are resident (live) in the UK but are not domiciled there (as they consider somewhere else to be their real home or intend or returning to their home country).
What is the Benefit of Non-Dom Status?
Non-Domiciled residents benefit from a favourable tax regime known as a ‘remittance basis tax system’, whereby they are exempted from paying any tax on any income or capital gains derived outside the UK, unless such income is remitted (brought) to the UK.
Furthermore, Non-Dom Status protects non-domiciled residents from being subject to Inheritance Tax on non-UK sited assets.
What is Changing?
On the 29th of July 2024, the British Government published a policy document confirming that there will be substantial amendments to the current tax regime.
As from the 6th of April 2025, the UK Non-Dom Regime will begin to be phased out of the UK Tax System. Thus, non-domiciled residents will become subject to tax on their worldwide income and gains in accordance with the normal tax rules for UK residents.
Non-domiciled residents will also become subject to Inheritance Tax on their worldwide assets if they have been resident in the UK for over 10 years.
More information regarding the change in tax regime is expected to be published with the Autumn Budget in October.
Malta as an Attractive Alternative
The announcement has caused many UK Residents holding Non-Dom Status to consider relocating to other jurisdictions with favourable tax regimes. Malta, renowned for its idyllic landscapes and rich cultural heritage, is one of the most popular alternatives being considered by such individuals.
Individuals residing in Malta benefitting from Non-Dom Status are only taxed on (i) income sourced in Malta and (ii) other income remitted (brought) to Malta. This means that any foreign capital gains, whether remitted to Malta or not, are not taxable in Malta.
Route to Maltese Residence for EU/EEA Citizens
EU and EEA citizens enjoy the right to leave their home state and to move and freely reside within the territory of any other Member State, including Malta. This right is also extended to family members of EU and EEA citizens.
Our brochure for EU citizens looking to relocate to Malta provides further information:
Route to Maltese Residence for Third-Country Nationals
Third-country nationals (TCNs) include all persons not domiciled in the EU, EEA or Switzerland. There are a number of different routes by which a TCN can the right to reside in Malta.
Our brochure for non-EU citizens looking to relocate to Malta provides further information:
Route to Maltese Residence under Retirement Schemes
Our brochure on Retirement Opportunities in Malta provides alternative options to both EU Citizens and TCNs:
How can Zeta Assist?
Here at Zeta, we specialize in assisting individuals in navigating the complexities of relocating. With our expertise, we can help you identify the most suitable route for residency, handle the necessary paperwork and offer personalised advice tailored to your specific circumstances.
Our team of experienced professional is dedicated to providing comprehensive guidance throughout the entire residency application process, ensuring a seamless and efficient experience.