Part II · Jurisdictions · No. 14

United Kingdom

A major holding jurisdiction in transition. The longstanding resident non-domiciled regime has been substantially reformed from April 2025, replacing the remittance basis with a four-year foreign income and gains regime. London remains the global hub of the art-and-auction trade.

Why this jurisdiction matters

The UK has played a particular role in international wealth structuring through the non-dom regime — providing favorable taxation of foreign-source income and gains for non-domiciled residents on a remittance basis. The regime has been a magnet for international wealth and a recurrent political issue. Major reforms enacted in the Spring Budget 2024 and Finance Act 2025 replace the historic non-dom system from 6 April 2025.

The relevant tax regime

• Income tax. Progressive to 45% top marginal.
• Capital-gains tax. Generally 24% on residential property gains, 20% on other gains (rates as adjusted by Autumn 2024 budget).
• Inheritance tax (IHT). 40% above nil-rate band (£325,000) and residence nil-rate band (up to £175,000), with seven-year gift rule and various reliefs.
• VAT. 20% standard; 5% on art import; zero-rate on books.
• SDLT (Stamp Duty Land Tax). Progressive on residential transactions to 12% (15%+ for additional-property and non-resident purchasers).

The new four-year FIG regime

From 6 April 2025, new UK residents (who have been non-UK resident for at least the prior 10 years) are exempt from UK tax on foreign income and gains arising during their first four years of UK residence. The regime is a transitional concession from the prior remittance basis. Beyond year four, worldwide taxation applies on the arising basis.

Registration or residency mechanics

UK residency determined under the Statutory Residence Test (FA 2013 Schedule 45) — day count, ties to UK, prior residency. Inheritance tax exposure follows residency historically (but reformed alongside non-dom changes to a "long-term resident" basis from April 2025).

Reporting and disclosure

CRS participant. FATCA Model 1 IGA. Trust Registration Service. Persons of Significant Control Register on companies.

The substance question

UK residency is now the dominant connecting factor. The new long-term-resident IHT test (resident for 10 of the prior 20 years) reduces the importance of domicile for IHT.

Recent changes

The 2024 Spring Budget and Finance Act 2025 abolish the remittance basis of taxation for foreign income and gains, replacing it with the four-year FIG regime, and replace the IHT domicile test with a residence-based test. The largest UK private-wealth tax reform in decades.

Common asset classes parked here

• Fine art — London auction market; 5% import VAT preserved.
• Fine wine — UK bonded warehouses, in-bond trading.
• London real estate — high SDLT for foreign and additional-property buyers.
• Thoroughbred horses — Newmarket racing and Tattersalls sales.
• Trust structures using English-law instruments.

Reviewed May 2026