Immigration
Tax Planning

The UK non-domicile tax status was abolished effective 6 April 2025. This was a fundamental change to the UK tax system that had been in place for over 200 years.

Previously, non-doms could elect the remittance basis of taxation, meaning foreign income and gains were only taxed in the UK if brought into the country. This regime has now been replaced with a new framework.

Under the new rules from 6 April 2025, a four-year overseas income and gains exemption applies to new UK arrivals. During this four-year window, overseas income, gains, and wealth are exempt from UK taxation. After the four-year period, individuals are taxed on worldwide income on the arising basis, regardless of domicile.

Various transitional provisions are in place for individuals who held non-dom status before 6 April 2025, covering matters such as existing offshore trusts, accumulated foreign income, and ongoing tax planning arrangements. Historical matters remain relevant for existing non-doms navigating these transitional rules.

Competent professional advice is essential to navigate both the new and transitional rules effectively. Contact us to discuss your position under the new regime.

From 6 April 2025, individuals who become UK tax resident benefit from a four-year window during which their overseas income, gains, and wealth are exempt from UK taxation. This replaces the previous non-dom remittance basis regime.

Key features of the new regime: • The four-year exemption period starts from the tax year you become UK resident • During the four-year window, overseas income and gains are not subject to UK tax • No annual charge applies (unlike the old remittance basis charges of £30,000/£60,000) • After the four-year period, you are taxed on worldwide income on the arising basis

To qualify, you must not have been UK tax resident in any of the four tax years preceding your arrival. This is designed to benefit genuine new arrivals rather than those who briefly leave and return.

Various transitional provisions apply for those who held non-dom status before 6 April 2025, and competent advice on navigating these rules is essential. Email PaulaPayen@parousia-accounting.com for a comprehensive assessment of your position.

Deemed domicile is a statutory rule treating long-term UK residents as UK-domiciled for tax purposes, even if their actual domicile remains non-UK.

Two deemed domicile triggers exist: • For income tax and capital gains tax: you become deemed UK-domiciled after 15 years of UK tax residence in the last 20 tax years • For inheritance tax: you're deemed domiciled if you were UK resident in 15 of the 20 tax years immediately before the relevant tax year

Once deemed domiciled, you lose remittance basis access and are taxed on your worldwide income and gains on the arising basis (same as UK domiciles). For inheritance tax, deemed domicile brings all your worldwide assets into the UK IHT net.

Importantly, deemed domicile has a "tail"—if you leave the UK, it continues for several years after departure. The 15-year clock makes pre-arrival planning essential, particularly in years 10-14 when the window for effective planning narrows.

The abolition of non-dom status from 6 April 2025 includes various transitional provisions for individuals who held non-dom status under the previous regime.

These transitional arrangements cover: • Existing offshore trust structures and their treatment under the new rules • Previously accumulated foreign income and gains held offshore • The transition from remittance basis to the new regime • Rebasing provisions for certain capital gains • Ongoing compliance obligations during the transitional period

The transitional rules are complex and fact-specific. What applies to your situation depends on factors including how long you have been UK resident, whether you elected the remittance basis, and the nature of your offshore structures.

Historical non-dom matters remain relevant for existing non-doms who need to navigate these transitional provisions. The interaction between old and new rules requires careful analysis to ensure no unexpected tax liabilities arise.

Given the complexity, professional advice is essential. Contact us to review your specific transitional position.

Pre-arrival asset structuring is the single most important tax planning opportunity for non-doms, because many planning options disappear once you're UK-resident.

Key strategies include: • Realizing capital gains while still non-UK-resident (no UK tax applies to gains before arrival) • Restructuring investment portfolios to separate clean capital (pre-arrival wealth) from future income and gains • Establishing offshore trusts to shelter income and gains from UK tax (with significant restrictions) • Reorganizing corporate structures to minimize UK tax exposure • Timing income receipts to occur before UK arrival when possible

UK tax law includes anti-avoidance provisions—temporary period of non-residence rules, transfer of assets abroad rules, and controlled foreign company provisions—which experienced advisors must navigate.

The critical timing: structures must be established before you become UK tax-resident; retroactive planning is rarely possible. Many clients regret not engaging tax advisors 12-18 months before UK arrival. We recommend beginning planning 18-24 months before relocation for optimal results.

Schedule a consultation or email PaulaPayen@parousia-accounting.com to start your pre-arrival planning today.

The Statutory Residence Test (SRT) is the UK's complex legal framework determining whether you're UK tax resident in a given tax year.

The SRT has three parts: • Automatic overseas tests (if you pass any, you're automatically non-UK-resident) • Automatic UK tests (if you pass any, you're automatically UK-resident) • Sufficient ties test (if neither automatic test applies, residence depends on your UK ties and days present)

Key factors include: number of days spent in the UK (183+ days almost always means residence), available UK accommodation, substantive UK work, UK family presence, and whether you were UK-resident in previous years.

The SRT's complexity creates planning opportunities—carefully managing UK days and ties can delay or avoid UK residence. However, aggressive positions risk HMRC challenge. Split year treatment is possible in arrival and departure years, reducing the tax year portion when you're UK-resident.

SRT outcomes are highly fact-specific, requiring detailed day-counting and evidence gathering.

This depends on the timing and nature of the income. Pre-arrival clean capital (wealth you accumulated before becoming UK-resident) can generally be remitted to the UK tax-free, provided you can prove it represents capital rather than income or gains. This is why pre-arrival structuring is essential—clearly separating clean capital from future income and gains.

Once UK-resident on the remittance basis, remitting foreign income or gains triggers UK tax. However, strategic planning can minimize this: • Using clean capital for UK expenses while keeping income offshore • Establishing mixed fund accounts with careful ordering rules • Using offshore credit cards backed by offshore income (certain conditions apply) • Timing remittances for years when you're non-UK-resident or no longer using remittance basis

Business investment relief provides limited remittance tax relief for qualifying business investments. The remittance rules are extraordinarily complex with severe penalties for errors—specialist advice is essential before moving money to the UK.

Contact PaulaPayen@parousia-accounting.com for expert remittance planning guidance.

US citizens face unique complications in UK tax planning due to the US's worldwide taxation system. Unlike most countries using residence-based taxation, the US taxes citizens' worldwide income regardless of residence.

This creates double taxation issues: as a US citizen living in the UK, you're subject to both UK and US taxation on your worldwide income. The UK-US tax treaty provides relief through foreign tax credits, but timing mismatches and structural differences create friction.

US citizens cannot benefit from many standard UK tax planning structures—offshore trusts are particularly problematic as US grantor trust rules may cause immediate US taxation while UK provides deferral. PFICs (Passive Foreign Investment Companies) create punitive US taxation for non-US collective investments.

Required US tax reporting includes: • FBAR (Foreign Bank Account Reports) • FATCA reporting • Form 8938 (Statement of Specified Foreign Financial Assets)

These are complex and strictly enforced with severe penalties. Effective planning requires coordinated US and UK tax expertise—seemingly obvious UK strategies often trigger unexpected US tax consequences.

We work with US tax specialists to provide integrated advice. Email PaulaPayen@parousia-accounting.com for US-UK coordinated tax planning.

Begin planning 18-24 months before your planned UK arrival date for optimal results.

This timeline allows sufficient time for: • Comprehensive asset and income analysis • Corporate restructuring if needed (often 6-12 months) • Establishing and funding offshore structures (3-6 months with proper due diligence) • Capital gains realization while non-UK-resident • Income timing strategies • Domicile assessment and documentation

Many planning opportunities have strict timing requirements—for example, certain trust structures must be established while you're non-UK-domiciled and non-UK-resident, requiring completion before you relocate. Rushed planning increases error risk and limits available strategies.

If you're already UK-resident, some opportunities remain but many are foreclosed—still seek advice immediately. Even clients several years into UK residence benefit from planning for future years, deemed domicile mitigation, and eventual departure planning.

The worst approach is arriving in the UK with no planning and realizing years later that simple pre-arrival steps would have saved substantial tax. Schedule a consultation today to start your planning.

Parousia has 38 years of experience advising high-net-worth individuals and families on UK immigration tax planning.

Our comprehensive service includes: • Guidance on the new four-year overseas income exemption • Transitional provisions advice for existing non-doms • Statutory Residence Test analysis and day-counting strategies • Pre-arrival asset restructuring advice • Offshore trust establishment and ongoing administration • Worldwide tax position analysis • US-UK coordination for American clients • UK tax return preparation under the new regime • HMRC enquiry defence if planning is challenged

We take a long-term approach—planning for your entire UK residence period and eventual departure, not just the first year.

Our clients typically include: • Executives on international assignments • Entrepreneurs relocating to the UK • Family offices managing global wealth • Individuals seeking UK residence for family or lifestyle reasons

We coordinate with your existing advisors—overseas accountants, lawyers, and investment managers—ensuring seamless integrated advice across all jurisdictions.

Contact us or email PaulaPayen@parousia-accounting.com to discuss your immigration tax planning needs.