The UK’s Labour government has introduced a number of significant tax changes and the impact is being felt by individuals with UK and international interests.
For people who live in the UK, have previously lived there, have assets there, or move between the UK and another country, understanding these changes has become increasingly important.
One of the biggest changes is the way the UK now looks at residence when determining an individual’s exposure to tax, particularly in relation to Inheritance Tax.
Previously, concepts such as domicile played an important role in determining whether someone’s worldwide estate could be subject to UK Inheritance Tax. From 6 April 2025, the rules moved towards a residence-based system.
This means your UK residence history can now be an important part of understanding your long-term tax position – even if you are no longer living in the UK.
So, what has changed – and does it affect you?
A few changes to be aware of:
1. The non-dom regime has changed
From 6 April 2025, the UK’s previous non-dom rules were replaced with a residence-based system. For qualifying new UK residents, a new four-year Foreign Income and Gains regime may apply.
In simple terms, eligible individuals who have not been UK tax resident for the previous 10 consecutive tax years may be able to benefit from specific tax treatment on certain foreign income and gains during their first four years of UK residence.
2. Inheritance Tax has changed
The UK has moved to a residence-based approach for Inheritance Tax. Long-term UK residents can potentially have their worldwide assets within the UK Inheritance Tax net.
This is important for anyone with assets outside the UK. Having overseas assets does not automatically mean they are outside the scope of UK Inheritance Tax.
3. The “10-year tail”
This is an important part of the new rules.
For some individuals who leave the UK after being long-term UK residents, UK Inheritance Tax exposure can continue for a period after they become non-UK resident.
The length of that period depends on their UK residence history. It is not simply a blanket 10-year tax charge for everyone who leaves.
Why does this matter?
Because your tax position doesn’t necessarily start and end with where you live today.
It can also depend on:
- Where you have lived previously
- How long you were UK resident
- Where your assets are held
- Where your income and gains arise
- Whether you have a business in another country
- Whether you are planning to move countries
- Whether you may return to the UK in the future
This means a change in residence can have consequences that are easy to overlook.
Should you review your position?
The UK tax landscape has changed. If you have a UK connection, it is worth asking whether your current tax and financial planning still makes sense under the new rules.
At SAIL International, we work with individuals to look at the full picture across countries. We help you understand how the different pieces fit together and what they could mean for you.
If you have UK and international interests, now is a good time to review your position.
Book a FREE 15-minute consultation and start a conversation about your circumstances, your goals and the opportunities available to you.