For two centuries a foreigner could live in London and pay UK tax only on what he brought into the country. That arrangement, the remittance basis for non-domiciled residents, ended on 6 April 2025. What replaced it, the four-year regime, is simpler, shorter and, for a Gulf family that keeps its wealth at home, more consequential: four years free of UK tax on foreign income and gains, then worldwide taxation, and after ten years of residence worldwide inheritance tax.
Tax
The end of non-dom status and the four-year regime: what it means for a Gulf family thinking of living in London
What changed with the end of non-dom status
A Gulf family that becomes UK resident after ten years abroad pays no UK tax on foreign income and gains for its first four tax years, but must claim on a return each year and disclose the amounts. From year five it is taxed on worldwide income at up to 45 per cent and gains at up to 24 per cent. After ten of twenty tax years resident, the worldwide estate falls within inheritance tax at 40 per cent. The catch: the four years cannot be paused or restarted.
Domicile, a concept of where a person’s permanent home is, no longer decides UK tax. Residence does, under the Statutory Residence Test, year by year. A person who becomes UK resident after ten consecutive years of non-residence qualifies for the foreign income and gains regime for their first four years of residence; everyone else resident in the UK is taxed on worldwide income and gains as it arises.
The remittance basis has gone for everyone
The remittance basis, under which foreign income could be kept abroad untaxed indefinitely, is gone for everyone, and the reason it was most useful to Gulf families, that it allowed decades of London residence without UK tax on the family business at home, is gone with it.
The four-year regime for new UK residents
A qualifying new resident pays no UK tax on foreign income (dividends from the family company in Jeddah, rent from the Dubai villa, interest on the Gulf accounts) or foreign gains for four tax years, whether or not the money is brought to the UK; there is no longer any penalty for remitting. UK income, the London rent, and UK gains are taxed as normal.
Conditions for claiming the four-year regime
The conditions: the person must have been non-UK resident for the ten tax years before arrival, and must claim the regime on a self-assessment return each year, which means filing with HMRC and disclosing the foreign income and gains being relieved. A family that spends four years in London for the children’s schooling can do so with its home wealth untouched; the fifth year is the question.
Disclosing foreign income and gains to HMRC each year
The old remittance basis required no disclosure of foreign income left abroad. The new regime requires the amounts to be stated on the return in order to claim relief on them, which for a Gulf family means telling HMRC what the family business pays, what the portfolio yields and what was realised on the sale of a Riyadh plot, every year for four years.
Who sees the foreign income and gains you disclose
The figures are confidential to HMRC and are not shared with the Gulf authorities under the treaty beyond what the Common Reporting Standard already exchanges, but they are stated, and a family that has never declared its wealth to any tax authority should understand that before claiming. A family that does not claim the regime is taxed on the foreign income in full.
UK tax on worldwide income and gains from year five
From the fifth year of residence the family is taxed on worldwide income at up to 45 per cent and worldwide gains at up to 24 per cent, with credit for any foreign tax under the treaties, which for the Gulf means none.
Planning the London years as four tax years
A family that stays into year five has, in effect, decided to pay UK tax on the Jeddah business, and should decide that deliberately: most Gulf families the firm advises plan the London years as four, keep the home as a non-resident’s second home thereafter, and keep the Gulf residence as the main one.
When the fifth tax year of UK residence begins
The day the fifth year begins is 6 April after four tax years, and a family that arrived in September 2026 reaches it on 6 April 2031, not September 2030, which is a point in the family’s favour.
Inheritance tax and the ten-year long-term residence test
The old test, domicile, is replaced for inheritance tax by long-term residence: a person who has been UK resident for ten of the last twenty tax years is a long-term resident and their worldwide estate is within UK inheritance tax at 40 per cent above the allowances, with a tail of three to ten years after leaving depending on how long they stayed.
Inheritance tax under ten years: UK assets only
A non-resident, and a resident of fewer than ten years, is taxed only on UK assets, which for a Gulf family is the London house, as our guide on inheritance tax for Gulf families explains.
Ten years of UK residence need not be consecutive
The ten years need not be consecutive. A family that spends four years in London for school, leaves, and returns for four years for university, is at eight; a third stay makes the whole estate taxable. This is the rule that changes the shape of a family’s London life, and it is counted in tax years on the Statutory Residence Test, which is why our residence guide matters.
Former non-doms and the temporary repatriation facility
A family that lived in London before April 2025 on the remittance basis has a different position: it loses the remittance basis from April 2025, may qualify for the four-year regime only if it was non-resident for the ten years before its current period of residence (which a long-standing resident was not), and may use the temporary repatriation facility, under which foreign income and gains that arose before April 2025 can be brought to the UK at a flat rate of 12 per cent in 2025/26 and 2026/27 and 15 per cent in 2027/28, instead of the full rates.
Why many left London
Many such families left London in 2024 and 2025, which is part of why prime London is at the price our market note describes; those who stayed should use the facility while it lasts.
Tax planning before your first 183 days in the UK
Before the first 183 days: decide whether the London years are four or longer, because the four-year regime is a one-time allowance that starts on the first year of residence and cannot be paused. Realise gains and take dividends in the Gulf before arrival, since gains that arise before residence are never UK-taxed.
Names, wills and the ten-year inheritance tax clock
Put the London house in the right names and make the English will, as our guides on joint ownership and on wills set out. Count the ten-year clock for inheritance tax from the first year and plan the exit before year ten. And keep the Gulf home, lived in, so that the family’s residence can end cleanly when the London years do.
A family that does these five things can spend four years in London on the same terms its grandparents had for forty; a family that drifts into residence does not.
Sources: Changes to the taxation of non-UK domiciled individuals (GOV.UK) · Tax on foreign income: residence (GOV.UK) · Inheritance tax (GOV.UK) · Statutory Residence Test guidance RDR3 (GOV.UK). Checked against HMRC’s guidance on the foreign income and gains regime, the temporary repatriation facility and the long-term residence test for inheritance tax on GOV.UK on 14 October 2026. General information, not tax advice; a family contemplating UK residence needs a UK tax adviser before the first 183 days. Figures verified 14 October 2026.
Frequently Asked
Questions about the end of non-dom status
Not while you are non-resident under the day-count tests; your UK tax is on the London rent and the house’s gains and, on death, the house. It applies the year you become resident.
For a senior school from thirteen, no; for sixth form and university, nearly; for a family that arrives when the child is fourteen and leaves at eighteen, exactly. The schooling plan and the tax plan should be the same document.
Only after ten consecutive years of non-residence. The regime is for new arrivals, and a family that has used it is not new.
The foreign income and gains regime. A person who becomes UK resident after ten consecutive years of non-residence pays no UK tax on foreign income or gains for their first four years of residence, whether or not the money is brought to the UK. Everyone else resident in the UK is taxed on worldwide income and gains as it arises. Domicile no longer decides UK tax; residence does.
Yes, to claim the relief. The amounts must be stated on the self-assessment return each year for four years. The figures are confidential to HMRC and are not shared with the Gulf authorities beyond what the Common Reporting Standard already exchanges. A family that does not claim the regime is taxed on the foreign income in full.
Worldwide income at up to 45 per cent and worldwide gains at up to 24 per cent, with credit for any foreign tax under the treaties, which for the Gulf means none. UK income, such as the London rent, and UK gains are taxed as normal throughout, including in the first four years.
On 6 April after four tax years. A family that arrived in September 2026 reaches it on 6 April 2031, not September 2030, which is a point in the family’s favour. The regime is a one-time allowance that starts on the first year of residence and cannot be paused.
Once a person has been UK resident for ten of the last twenty tax years, their worldwide estate is within UK inheritance tax at 40 per cent above the allowances, with a tail of three to ten years after leaving. The ten years need not be consecutive: two four-year stays make eight, and a third stay makes the whole estate taxable. Under ten years, only UK assets such as the London house are taxed.
A facility for families that lived in London on the remittance basis before April 2025. Foreign income and gains that arose before April 2025 can be brought to the UK at a flat rate of 12 per cent in 2025/26 and 2026/27 and 15 per cent in 2027/28, instead of the full rates. Those who stayed should use it while it lasts.
Before the first 183 days: decide whether the London years are four or longer; realise gains and take dividends in the Gulf before arrival, since gains that arise before residence are never UK-taxed; put the London house in the right names and make the English will; count the ten-year inheritance tax clock from the first year; and keep the Gulf home, lived in. A UK tax adviser belongs before the first 183 days.
