As planned, the Labour Party will abolish the current non-dom tax status from 6 April 2025.
In its place, it will introduce a new residence-based regime. Individuals opting into the regime will get a short-term break, avoiding UK tax on foreign income and gains for only the first four years of tax residence.
However, from 6 April 2025, the Government will introduce a strict residence-based system for Inheritance Tax, effectively ending the use of offshore trusts to shield assets from IHT.
The 50 per cent reduction in foreign income in the first year, previously proposed by the last Government, will be scrapped entirely.
For Capital Gains Tax, remittance basis users can rebase foreign assets to 5 April 2017 upon disposal under restrictive conditions, offering limited benefit, while overseas Workday Relief will remain but in a reformed, restrictive format.
In addition, the Temporary Repatriation Facility will be extended to three years with expanded scope to offshore structures.