The UK non-dom status has been a popular tax benefit for high-net-worth individuals, allowing them to pay taxes only on income earned within the UK, while foreign income could often be excluded from UK taxes. However, as part of upcoming changes, the UK government plans to end the non-dom status by April 2025. This means that many individuals who have relied on this system will need to find alternative ways to manage their tax liabilities. Despite these changes, there are several UK non-dom alternatives in Europe and beyond that offer tax-friendly residency and tax programs.
This article will explore some of these countries and their tax schemes, providing options for investors, retirees, and business owners looking to maintain tax efficiency while enjoying the benefits of living in a new country.
What is the UK non dom status?
The UK non-domiciled (“non-dom”) status is a tax designation for individuals who live in the UK but have their permanent home (domicile) outside the country. This status allows them to be taxed only on their UK income and gains, while foreign income and gains are taxed only if brought into the UK, under the “remittance basis” of taxation. This system has historically attracted wealthy individuals to the UK by offering tax advantages on foreign earnings.
UK Non-Dom Tax Rules
Since April 2008, non-doms who have been UK residents for a certain number of years have had to pay an annual charge to continue using the remittance basis:
- £30,000 for those who have lived in the UK for at least 7 out of the past 9 tax years (later increased to £50,000 and then £60,000).
- £90,000 for those who have lived in the UK for 17 out of the past 20 tax years.
- Those who have lived in the UK for 15 years or more out of the last 20 years are considered “deemed domiciled” and must pay tax on worldwide income and gains like other UK residents.
UK Non-Dom Tax Status Rules 2025
The UK government has announced that the non-dom regime will end in April 2025 and be replaced with a new Foreign Income and Gains (FIG) system. Under this system:
- New UK tax residents will not have to pay tax on foreign income and gains for their first four years of residency.
- After four years, they will be taxed on their worldwide income like other UK residents.
- Long-term residents (those in the UK for four or more years by April 2025) will not qualify for the exemption but may benefit from a one-year 50% tax reduction on foreign income in 2025/26.
The Eight Best Tax Friendly UK Non Dom Alternatives
With the UK’s non-dom status ending in 2025, many investors and wealthy individuals are looking for tax-friendly residency options in Europe. Outside Europe, Caribbean Citizenship by Investment (CBI) programs offer another great alternative, providing visa-free travel and tax benefits without the burden of high taxes.
1. Greece
Greece offers a highly tax-friendly environment with the Greece Flax Tax regime. This regime provides a flat annual tax of 100,000 on foreign income for up to 15 years, regardless of the amount earned. The tax program is ideal for high-net-worth individuals and retirees looking for a tax-efficient lifestyle.
In addition, the country offers the Greece Golden Visa, which grants residency with an investment of at least €250,000 in real estate and provides access to visa-free travel within the Schengen Area. To benefit from the Non-Dom program, applicants must not have been a Greek tax resident for seven of the last eight years and must invest at least €500,000 in Greece within three years. Additionally, family members can be included in the program for an extra €20,000 per year per person.
To learn more about the Greece Golden Visa
2. Spain
Spain is another tax-friendly country, especially for entrepreneurs and high earners. Through the Spain special expat regime, also known as the Beckham Law, Spain offers a flat 24% tax rate on Spanish-source income for qualifying foreign residents, providing a significant tax advantage over the higher progressive tax rates.
To qualify, applicants must not have been tax residents of Spain for the last 10 years. You must also be an employee or a company director with less than a 25% stake, perform at least 85% of your work in Spain, and apply within six months of registering with Spanish social security.
The country also offers the Spain Golden Visa, which requires an investment of €500,000 in real estate. It grants residency and visa-free travel across the Schengen Area. However, the program is set to end on 3rd April 2025.
3. Malta
Malta is another tax haven for foreign residents. Under the Malta Residence Program(MRVP), non-domiciled individuals are taxed only on income brought into the country, with a flat 15% tax rate on foreign income and exemptions on foreign capital gains.
Additionally, the Malta citizenship by investment program offers citizenship for €600,000 donations and a real estate investment of €700,000 held over five years.
Malta also has the Malta Residency by Investment, which offers residency by investment with a property purchase of at least €375,000 or a €14,000 yearly lease, along with a donation to the national fund.
To qualify for Malta’s residence program, you must not be domiciled in Malta but must become a tax resident, own or rent a qualifying property in Malta (minimum purchase price of €275,000 or rental of at least €9,600 per year); lastly, applicants must not spend more than 183 days per year in any single foreign country.
4.Antigua and Barbuda
The Antigua and Barbuda citizenship by investment program is another great UK nondom alternative. The investment options include donating $230,000 to the National Development Fund (NDF). Alternatively, real estate investments start at $300,000 in approved projects.
Antigua and Barbuda offers significant tax benefits, including no inheritance, wealth, or capital gains tax.
Personal income tax applies only to income earned within Antigua and Barbuda, so foreign income remains untaxed. It’s an attractive option for investors, retirees, and business owners.
5. St. Lucia
St. Lucia’s citizenship by investment program provides several investment options: a donation to the National Economic Fund starting at $240,000 for a single applicant or a real estate investment of at least $300,000.
St. Lucia is another country that imposes no capital gains tax, wealth tax, or inheritance tax. It taxes only locally earned income, meaning foreign income is exempt from taxation. This program is particularly appealing to high-net-worth individuals and entrepreneurs.
6. Dominica
Dominica’s citizenship by investment program is one of the most affordable Caribbean CBI options. Applicants can choose a non-refundable donation to the Economic Diversification Fund, starting at $200,000 for a single applicant, or a real estate investment starting at $200,000 in approved properties.
Dominica’s tax system is very favorable, with no capital gains tax, no inheritance tax, and no wealth tax. As with the others, income from outside the country is not taxed, making it an ideal destination for investors and retirees looking for minimal tax exposure.
7. Grenada
Grenada’s citizenship by investment program offers two investment routes: a donation to the National Transformation Fund for $2350,000 for a single applicant or a real estate investment starting at $350,000. Grenada is unique in that it has a tax treaty with the U.S., allowing Grenadian citizens to apply for the U.S. E-2 Visa, which makes it a desirable option for U.S. citizens.
Additionally, Grenada has no inheritance tax, no capital gains tax, and no wealth tax. Foreign income is not taxed, making Grenada highly attractive to entrepreneurs and high-net-worth individuals looking to minimize taxes.
8. St. Kitts and Nevis
St. Kitts and Nevis citizenship by investment program is one of the longest-established CBI programs in the Caribbean. The investment options include a donation to the Sustainable Growth Fund for $150,000 for a single applicant or a real estate investment starting at $400,000 in approved projects.
St. Kitts and Nevis offers exceptional tax benefits with no capital gains tax, inheritance tax, wealth tax, and income tax. Foreign-sourced income is not taxed, making it one of the most tax-efficient options for global citizens. St. Kitts and Nevis also offers access to visa-free travel to over 150 countries.
How Can Global Citizen Solutions Help You?
Global Citizen Solutions is a boutique migration consultancy firm with years of experience delivering bespoke residence and citizenship by investment solutions for international families. With offices worldwide and an experienced, hands-on team, we have helped hundreds of clients worldwide acquire citizenship, residence visas, or homes while diversifying their portfolios with robust investments.
We guide you from start to finish, taking you beyond your citizenship or residency by investment application.
Frequently Asked Questions About UK Non Dom Alternatives
What are the alternatives to UK non-dom status?
Alternatives to UK non-dom status include residency and citizenship programs in countries with favorable tax regimes, such as Greece, Spain, Malta, and Caribbean nations like Antigua and Barbuda. These countries offer tax benefits for foreign investors, retirees, and business owners.
How can high-net-worth individuals benefit from UK non-dom alternatives?
High-net-worth individuals can benefit from UK non-dom alternatives by taking advantage of tax-friendly programs that offer low or flat tax rates on foreign income, capital gains exemptions, and access to favorable residency and citizenship opportunities, helping them reduce tax liabilities.
Are there countries offering similar benefits to UK non-dom status?
Yes, countries like Greece, Malta, Spain, and several Caribbean nations offer tax programs that provide similar benefits to the UK non-dom status, such as flat tax rates on foreign income, exemptions on foreign capital gains, and tax-efficient residency options.
What are the tax advantages of UK non-dom alternatives?
UK non-dom alternatives offer tax advantages like flat tax rates on foreign income, exemptions on foreign capital gains, and lower overall tax burdens for expatriates and investors. These programs help individuals reduce their global tax liabilities while living in desirable locations.
How does relocating to another country affect UK non-dom status?
Relocating to another country can impact UK non-dom status by potentially changing your tax residency status. If you spend significant time in a new country, you may lose non-dom privileges and become subject to the tax laws of the country you relocate to, including higher taxes on foreign income.
