Ireland is now a more attractive alternative for people looking to keep non-domicile status as the UK Chancellor of the Exchequer Jeremy Hunt said in his recent budget speech that the non-domicile status in the UK after more than two centuries would be abolished from April 2025 to be replaced by a new tax system based on where people live.
To date where conditions are met this status has enabled UK resident individuals whose permanent home is outside the UK to benefit from the ‘remittance basis’, effectively exempting their foreign income and gains from UK taxation unless actually remitted to the UK.
The Chancellor’s changes means:
- Everyone will pay UK tax on their foreign income and gains after living in the country for 4 years by scrapping the “remittance basis” rule that only taxes money brought into the UK;
- New arrivals will benefit from 100% UK tax relief on foreign income and gains for their first 4 years;
- A temporary 50% cut in the personal foreign income subject to tax in 2025-26 for non-doms who will lose access to the remittance basis;
- Inheritance tax will also move to a residence-based regime.
It is anticipated that internationally mobile wealthy individuals will now relocate to Ireland.