As of April 2025, the United Kingdom will abolish the current tax regime for non-UK-domiciled individuals, also known as non-doms, and replace it with a new residence scheme called the Foreign Income and Gains system (FIG).
Starting 6 April 2025, the new system will exempt individuals who become tax residents of the United Kingdom from paying taxes on foreign income or gains for their first four years of residency. After this initial four-year period, they will be required to pay taxes in accordance with standard UK tax laws.
If you have been living in the UK for less than four years as of 6 April 2025, or if you have spent more than 10 tax years outside the country, you may be eligible to participate in the new program.
If your residency in the UK reaches four years or more by 6 April 2025, you will not be eligible for the program. Instead, you will need to manage your taxes according to specific rules, including a provision that allows you to pay only 50% of your taxes in the 2025/2026 tax year.
Individuals who have acquired the domiciled status prior to the aforementioned date will continue paying their taxes as usual.
When discussing this law, it’s important to consider that it could change if there is a shift in government. The UK’s general elections, scheduled for no later than 28 January 2025, could impact the future of this legislation.
The current non-dom tax regime has been enforced since April 2008. It states that all non-doms who have had residency in the UK for at least seven out of the past nine tax years had to pay £30,000 annually. Since then, the charge has been increased to £50,000 and later £60,000, and it applies to those who had residency or 12 of the past 14 tax years. Those who have held residency in the UK for 17 out of 20 past tax years had to pay £90,000.
Should UK Non-Doms Relocate to Cyprus in 2024?
With recent changes in the UK’s tax landscape, Cyprus stands out as an excellent alternative for those affected by the abolishment of the Non-Dom tax regime.
In 2015, the country introduced its own non-dom initiative, designed to attract individuals and businesses. Under this regime, individuals who have not been tax residents in Cyprus for 20 consecutive years prior to the tax year or the implementation of the non-dom regime are exempt from taxes on dividends and interest. Additionally, income exceeding €55,000 sourced from within Cyprus can benefit from a 50% tax exemption for up to 17 years.
Beyond its favorable non-dom provisions, Cyprus offers an attractive tax environment for all residents, supported by a stable political climate that fosters growth. With a corporate tax rate of just 12.5%—one of the lowest in the EU—and an extensive network of double taxation treaties, Cyprus is an appealing destination for individuals seeking both residence and business. This is further enhanced by the island’s strategic location, EU membership, and high quality of life.
