Story 1 of 3

The non-dom era is over - and the four-year FIG window is now running

▶ What changed

From 6 April 2025, the UK abolished the non-domicile regime and replaced it with a four-year Foreign Income and Gains relief period. New arrivals who have been non-resident for at least ten consecutive years get 100% relief on foreign income and gains for their first four UK tax years - no remittance required. After that, worldwide income is fully taxable. 2026–27 is the first full year this system is live.

▶ What this actually means

You moved to London. Back home - or in the country you just left - you have savings, investments, maybe a property generating rent. Under the old system, you could leave that money offshore and only pay UK tax if you brought it into the UK. Under the new system, you do not need to bring it in for HMRC to leave it alone. For your first four years as a UK resident, none of that foreign income is taxed here - full stop. After those four years, all of it is. The clock started the day you arrived.

◆ Anita’s take  PURCHASING POWER

For US or Indian professionals arriving in London, the four-year window may be the period in which your foreign income is at its most tax-efficient in the UK - potentially worth significantly more in real terms than the headline salary suggests. The purchasing power advantage is real but time-limited. What you do with your foreign assets during those four years, and how you structure them before the cliff, is the question that matters.

Story 2 of 3

Overseas Workday Relief is now capped - and the cap bites at £300k

▶ What changed

Overseas Workday Relief - which allows UK-based employees to exclude from UK tax the portion of salary earned on days worked outside the country - has been redesigned and capped. It now sits within the four-year FIG period and is capped at the lower of £300,000 or 30% of total employment income. For 2025–26 and 2026–27, employers and inbound employees are working through the practical implications.

▶ What this actually means

You work in London but spend a significant part of your year travelling - client meetings in Dubai, project work in New York, deals closing in Singapore. The days you worked outside the UK should not attract UK tax. That principle still holds. But there is now a ceiling on how much of your salary it can protect. For every £100 you earn, the maximum you can shelter is £30 - and only up to £300,000 in total. If your salary is high and your travel is heavy, less of your income is protected under this rule than it would have been before April 2025.

◆ Anita’s take  TAX SAVING

For US citizens coming into the UK, OWR creates an awkward interaction with FEIE and foreign tax credits. Reducing UK tax on a portion of your salary via OWR also reduces the foreign tax you can credit against your US liability - which could push your net US bill up. The relief looks attractive on the UK side. Whether it reduces your combined tax position is a different calculation entirely. Worth modelling both before assuming the relief is straightforwardly beneficial.

Story 3 of 3

UK inheritance tax now follows residence years, not where you were born

▶ What changed

UK inheritance tax - charged at 40% on estates above £325,000 - now applies to worldwide assets once you have been UK resident for ten out of the last twenty tax years. Previously the test was based on domicile - a concept rooted in long-term intention. The new test is purely about how many years you have lived here. There is no intention involved. Only the count.

▶ What this actually means

You moved to London in your mid-thirties. You own a flat back home, or your parents transferred property into your name years ago, or you have savings built up in another country. You have always assumed those assets have nothing to do with HMRC - they are not in the UK, they were not earned here, and you are not British. Under the old rules, that assumption was largely correct. Under the new rules, the only thing that matters is how many years you have lived in the UK. Reach ten years and HMRC can claim 40% of everything you own anywhere in the world when you die - above £325,000. For anyone who arrived in their thirties and plans to stay, that is not a distant risk. It is a countdown.

◆ Anita’s take  WEALTH PROTECTION

Ten years is closer than it sounds when you have been in London since your mid-thirties. For those approaching the threshold, the decisions made now - how assets are held, where property is registered, whether a trust arrangement is in place - could protect a significant portion of the wealth built over a career. Doing nothing and assuming the old domicile logic still applies is now an expensive assumption. For US citizens in London, this stacks on top of US estate tax, meaning both systems may reach the same assets simultaneously.

Settel

Thinking about a UK move - or already there and approaching year four? Settel shows you what each country will claim before the window closes.