UK non-dom

By the High Worth Citizen Editorial Team

April 2025 marked a watershed moment for globally mobile wealth. After more than two centuries, the United Kingdom’s non-domicile tax regime—which allowed UK-resident individuals with a foreign domicile of origin to shelter overseas income and gains from HMRC—was formally abolished. In its place, the government introduced a four-year Foreign Income and Gains (FIG) exemption for new UK arrivals. The consequence has been swift: 1,800 non-doms left the UK during the 2024/25 tax year, 50% above Office for Budget Responsibility projections. The UK now leads global HNWI net departures at -16,500, per Henley & Partners’ 2026 World Wealth Map. Against this backdrop, a record 165,000 HNWIs are projected to change tax residency globally in 2026—and understanding where they are going, and why, is essential intelligence for any internationally mobile high-net-worth individual.

Key Takeaways

• The UK abolished its non-dom regime in April 2025, replacing it with a 4-year FIG exemption; all UK tax residents are now liable for tax on worldwide income and gains regardless of domicile.
• 1,800 non-doms departed the UK in 2024/25—50% above OBR projections; the UK leads global HNWI net outflows at -16,500 per Henley & Partners.
• A record 165,000 HNWIs are projected to change tax residency globally in 2026, representing one of the largest single-year reshuffles of private wealth in recent history.
• The UAE is forecast to receive a net inflow of 9,800 millionaires in 2026; Switzerland, Italy, Greece, and Malta are also significant beneficiaries of the UK exodus.
• The Adam Smith Institute projects £111 billion in cumulative lost UK economic growth by 2035 and more than 44,000 fewer jobs by 2030 if outflows continue at current trajectory.

What the Non-Dom Abolition Actually Changed

Under the pre-2025 regime, UK residents who were domiciled abroad under English private international law could elect to be taxed on the “remittance basis”—meaning overseas income and gains were only taxable in the UK if brought into the country. For HNWIs with significant foreign-source wealth—investment income from offshore structures, foreign real estate gains, overseas business income—this represented a substantial and legally sound tax deferral mechanism.

From April 2025, all UK tax residents became liable for tax on worldwide income and gains, regardless of domicile status. The transitional relief—the four-year FIG exemption—only benefits new arrivals to the UK who have not been UK-tax-resident in the prior ten years, and only for the first four tax years of UK residence. For established non-doms who had been UK-resident for years or decades, the abolition was effective immediately, with limited transitional provisions for certain offshore trust structures still being clarified by HMRC.

Combined with simultaneous increases to capital gains tax rates—now aligned with income tax in many circumstances—and the reform of inheritance tax to a residence-based test from a domicile-based one, the cumulative fiscal impact for long-standing non-doms with substantial foreign wealth has been material. The OBR’s own revised forecasts acknowledge that actual non-dom departures ran 50% above initial modelling, suggesting the directional impact is not in dispute.

The Scale of the Departure Wave

Henley & Partners’ 2026 data places the UK at the top of the HNWI outflow league table, with a net loss of 16,500 HNW individuals—a figure encompassing departing non-doms and a broader cohort of UK-domiciled HNWIs responding to the sustained increase in the UK’s overall tax burden. The 2024/25 departure rate of 1,800 non-doms alone is expected to accelerate in 2025/26 as more individuals complete the legal and logistical process of ceasing UK residence.

The Adam Smith Institute has modelled the macroeconomic consequences: if approximately 11,050 non-doms depart, the UK economy could face up to £111 billion in cumulative lost growth by 2035 and more than 44,000 fewer jobs by 2030. Meanwhile, 35% of HNWIs globally have indicated they are actively evaluating lower-tax jurisdictions, according to data cited by Luxurious Magazine’s 2026 Great Wealth Migration report.

For HNWIs currently evaluating their own position, the relevant question is not whether to leave, but where to go—and on what legal and structural basis. The range of investment pathways to global citizenship and residency available has never been more professionally structured or competitively priced.

What This Means for HNWIs

For departing UK non-doms, the central imperative is establishing genuine, defensible tax residency in a new jurisdiction before HMRC can assert continued UK tax residence. The UK’s Statutory Residence Test (SRT) sets clear conditions: individuals spending fewer than 16 days in the UK per year are automatically non-resident; those spending 16–45 days must also satisfy specific “connection factor” tests. Many non-doms materially underestimate the UK day-count risk in the first years after departure, particularly if they maintain UK property, family ties, or business connections.

Wealth managers and migration lawyers widely recommend establishing substance in the destination jurisdiction immediately: purchasing or leasing property, registering for a local tax identification number, opening banking relationships, and meticulously documenting physical presence. The UAE, where no personal income tax exists and a 10-year Golden Visa requires a minimum AED 2 million (approximately $545,000) real estate investment, has become the dominant receiving jurisdiction for departing UK-based HNWIs. Italy’s flat-tax regime, which imposes a €200,000 annual levy on all foreign-source income regardless of amount, remains compelling for HNWIs with very large offshore portfolios. Greece’s non-dom programme charges a flat €100,000 annually—plus €20,000 per additional family member—and includes full Schengen area access.

Country Comparison: Top Relocation Destinations for Departing Non-Doms

The post-non-dom landscape has created a competitive market among receiving jurisdictions, each positioning its programme for specific HNWI profiles. The UAE remains the dominant choice for wealth accumulation and ongoing business activity: zero income tax, zero capital gains tax, zero inheritance tax, and a highly developed financial services infrastructure across the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM). The UAE welcomed approximately 6,700 millionaires in 2024, a 49% year-on-year increase, and is forecast to reach a net inflow of 9,800 in 2026, according to Henley & Partners.

Switzerland’s lump-sum (forfait fiscal) taxation is available to non-working foreign nationals who have not previously been Swiss-resident, with deemed income assessed at five times the annual rental value of the Swiss property, subject to cantonal minimums ranging from CHF 435,000 in Geneva to lower thresholds in Valais and Ticino. For HNWIs with large passive portfolios and no active employment income, Switzerland offers unparalleled European stability with a defined and manageable tax cost.

Italy and Greece appeal to those seeking EU lifestyle and market access. Malta’s Individual Investor Programme—restructured following the ECJ’s April 2025 ruling—offers EU citizenship rather than mere residency, though processing timelines and investment thresholds have increased materially. Portugal’s Non-Habitual Resident programme underwent reform in 2024, now offering a 20% flat rate on qualifying Portuguese-source professional income, with the previous foreign income exemption largely discontinued for most income types—making it less advantageous for passive-income HNWIs than in prior years.

Risks and Considerations

The risks of a poorly structured departure from UK tax residency are significant. HMRC has substantially increased its capacity and appetite for challenging non-dom exits deemed insufficiently substantive, analysing day-count records, digital footprint, financial transactions, and social ties. An individual found to have maintained UK tax residence despite claiming non-residency faces back-taxes, interest, and meaningful penalties.

Inheritance tax exposure warrants particular attention: under the UK’s new residence-based IHT test, HNWIs who were UK-tax-resident for 10 or more of the prior 20 years before death remain subject to UK IHT on their worldwide estate for a “tail” period extending up to 10 years post-departure. The timing and sequencing of departure decisions are therefore critical for long-standing residents.

Countries with which the UK has double-tax treaties—including the UAE, Switzerland, Italy, and Greece—offer varying degrees of certainty around treaty protection. HNWIs with complex, multi-jurisdictional structures should obtain jurisdiction-specific legal advice before establishing a new domicile of choice, and should not rely on treaty protections without confirming their applicability to their specific asset and income profile.

The Bottom Line

The abolition of the UK non-dom regime has set in motion a structural, multi-year redistribution of HNWI wealth and tax residency. The departure wave is not speculative: the data from Henley & Partners, the OBR, and independent economic modelling all point in the same direction. For HNWIs who remain in the UK and are weighing the new fiscal environment, the calculus depends on the source and location of wealth, length of prior UK residence, and family circumstances—all requiring bespoke professional advice. For those who have already decided to move, the priority is execution: establishing genuine residence, managing the UK day-count carefully, and selecting a receiving jurisdiction that matches both the financial profile and the lifestyle requirements of the individual and their family.

This article is for informational purposes only and does not constitute legal, tax, financial, or migration advice. HNWIs and family offices should consult qualified professionals in the relevant jurisdiction before making decisions based on the information presented.