What is a non-dom?

A "non-dom" (non-domiciled) refers to a UK tax status for individuals living in the UK whose permanent home (domicile) is in another country, allowing them to pay UK tax only on UK-sourced income and foreign income remitted to the UK, not on all worldwide income, though this system is being phased out for a new residency-based approach starting April 2025. This status, distinct from citizenship, historically offered significant tax advantages for wealthy individuals with foreign assets, but is now changing to a simpler, fairer system.

What are the benefits of being a non-dom?

Individuals with 'non-dom' status can avoid UK tax on their foreign income and gains, provided these are not brought into the UK. If foreign income is below the £2,000 tax income threshold, it is tax-exempt unless remitted to the UK.

How many non-doms live in the UK?

Figure 2 looks at non-domiciled taxpayers — around three-quarters of the combined population — we estimate that there were 73,700 individuals claiming non-domiciled taxpayer status in the UK in the tax year ending 2024, down 400 year-on-year (or 0.5%).

Do non-Doms pay tax on UK earnings?

A non-dom only pays UK tax on the money they earn in the UK. They do not have to pay tax to the UK government on money made elsewhere in the world (unless they pay that money into a UK bank account).

What does it mean to be non-domiciled?

A non-domicile (or non-dom) is a person living in a country but whose permanent home, or domicile, is legally considered to be another country, often leading to significant tax advantages, particularly in the UK. It's a tax status, not related to citizenship, and means they only pay local tax on income earned in their country of residence, not on foreign earnings, though rules are changing, especially in the UK as of April 2025. 

Who are the UK's 'non-doms'?

How long can you be non-domiciled?

It is defined by intention, not duration. It continues until a domicile of choice is established in a different country.

What is the 6 year rule for non residents?

Under the pre-2020 rules, a property could retain its CGT-free status if sold within 6 years of moving out (or indefinitely if not rented). But now, if you're a foreign resident at the time of disposal, the 6-year rule provides no protection.

Can you be domiciled but not resident?

By contrast, a domicile is intended to be permanent rather than temporary, whereas a residence means living in a particular locality and requires mere physical presence. Although domicile requires residence, residence alone does not establish the intent to remain permanently, which is necessary for domicile.

What is the 10 year tax rule?

The IRS generally has 10 years from the assessment date to collect unpaid taxes. The IRS can't extend this 10-year period unless the taxpayer agrees to extend the period as part of an installment agreement to pay tax debt or a court judgment allows the IRS to collect unpaid tax after the 10-year period.

How long do you have to stay outside the UK to be non-domiciled?

Overseas tests

You're usually non-resident if either: you spent fewer than 16 days in the UK (or 46 days if you have not been a UK resident for the 3 previous tax years) you worked abroad full-time (averaging at least 35 hours a week), and spent fewer than 91 days in the UK, of which no more than 30 were spent working.

Does David Beckham pay tax in the UK?

David Beckham was reportedly overlooked for a knighthood because of an investment in a film scheme considered tax avoidance by HRMC. It is calculated the Beckhams paid a total of £12.7m of tax, due from their dividends and other levies in the accounts of their two principal companies.

Why are billionaires leaving the UK?

The departures come amid several tax reforms under both the previous Tory government and the current Labour regime. High-net worth individuals (HNWIs) have faced several tax clampdowns lately, from changes to capital gains and inheritance tax to extra stamp duty rates as well as the end of non-dom status.

How to avoid the 60% tax trap in the UK?

To avoid the UK's 60% tax trap (where earning £100k-£125k effectively loses your personal allowance), significantly boost pension contributions via salary sacrifice or direct payments to reduce taxable income below £100k, claim all allowable expenses (like professional fees), or make charitable donations under Gift Aid to lower your Adjusted Net Income and reclaim your full tax-free allowance. 

What is the 183 day rule?

This commonly referenced rule is part of many international income tax treaties and generally states that an individual may be exempt from income tax in a Host country if they are present in that country for fewer than 183 days within a defined period – often a calendar year or rolling 12-month period.

What happens when non-dom status ends?

The new Act effectively abolished the non-dom regime from April 2025, although the old rules remain relevant for offshore income and gains received before that date. In addition to raising new tax concerns, the 2025 changes will impact how former non-doms invest and how they hold their investments.

How much can I inherit without paying taxes in the UK?

Overview. Inheritance Tax is a tax on the estate (the property, money and possessions) of someone who's died. There's normally no Inheritance Tax to pay if either: the value of your estate is below the £325,000 threshold.

How far back can the IRS go?

Generally, the IRS can include returns filed within the last three years in an audit. If we identify a substantial error, we may add additional years. We usually don't go back more than the last six years. The IRS tries to audit tax returns as soon as possible after they are filed.

Is the ATO cracking down on family trusts?

The crackdown has resulted in the ATO undertaking extensive audits of family trusts and historical distributions, and the issue of hefty Family Trust Distributions Tax (FTD Tax) assessments for noncompliance – being a 47% tax (plus Medicare levy) along with General Interest Charges (GIC) on any historical liabilities.

What are the red flags for IRS audits?

Not reporting all of your income is an easy-to-avoid red flag that can lead to an audit. Taking excessive business tax deductions and mixing business and personal expenses can lead to an audit. The IRS mostly audits tax returns of those earning more than $200,000 and corporations with more than $10 million in assets.

Can I live in one state and claim residency in another?

You can be considered a resident of multiple states. It's also possible to be considered a full-year resident of one state and a nonresident of another state, or a part-year resident in multiple states and nonresident in other states at the same time.

What is the 90% rule for non-residents?

The "90-day rule" for non-residents refers to two main concepts: in U.S. immigration, it's a guideline for when an official may presume visa fraud (actions within 90 days of entry, like unauthorized work or marriage, suggest intent to immigrate contrary to visa); in Canadian tax, it's a rule where a part-year resident can claim full federal tax credits if 90% or more of their world income came from Canadian sources during their non-resident period. 

How does the IRS determine your primary residence?

The IRS defines a primary residence (or principal residence) as the home where you live for the majority of the year, and you can only have one at a time, typically proven by factors like your tax return address, voter registration, and physical presence. To qualify for tax benefits, such as excluding gain from sale, you must have owned and lived in the home as your main residence for at least two of the five years before the sale. 

How much capital gains do I pay on $100,000?

For a $100,000 capital gain, you'll likely pay 15% on most of it as a long-term gain (around $12,000-$13,500), possibly some at 0% if you're in a lower bracket, but if it's a short-term gain (held 1 year or less), it's taxed as ordinary income, potentially at 22% or more (around $22,000+), depending on your total income and filing status, using the 2025/2026 brackets. 

Can you have two primary residences?

A primary residence, also known as a principal residence, is generally the home that you live in for most of the year. You can only have one primary residence, so you can't live in two homes an equal amount of time and have them both be your primary residence.

What is a simple trick for avoiding capital gains tax?

A simple way to avoid or reduce capital gains tax is to hold assets for over a year to qualify for lower long-term rates, use tax-advantaged accounts (like 401(k)s or IRAs), or offset gains with losses (tax-loss harvesting). For real estate, converting to a primary residence (if you meet the 2-of-5-year rule) or using a 1031 exchange (for investment properties) are key strategies, while donating to charity or passing assets to heirs (who get a step-up in basis) also eliminate the tax entirely.