UK Trends and Developments Contributed by: Russell Warren and Michael Langan, King & Spalding LLP
Alongside the FIG regime, the UK also introduced a temporary repatriation facility. This allows non-doms (who had previously claimed the remittance basis) to remit foreign income and gains into the UK and pay a reduced rate of UK tax. This facility will run for three tax years from 2025/26. Additionally, an individual who was a non-dom before 2025/26 and who claimed the remittance basis between 2017/18 and 2024/25, held their foreign assets on 5 April 2017 and sold those assets on or after 6 April 2025 will have those assets rebased to their 5 April 2017 market value. However, the individu - al may elect not to apply the rebasing if such rebasing is not advantageous to them. Inheritance tax Alongside the abolition of the non-dom regime for income and gains, the inheritance tax rules also adopted a new “long-term resident” test in place of the prior domicile test. Since 6 April 2025, an individual will be within the scope of UK inheritance if they have been UK tax resident for at least ten of the previous 20 tax years. Residence Residence in the UK for tax purposes has therefore become the key test. The UK’s residence rules no longer adopt a day count-only approach. An individual has to consider both a day count test and a ties test. These are set out in statute and have been in place since 6 April 2013. The rules provide that you will be tax resident in the UK for a tax year if: • you do not meet any of the automatic overseas tests; and • you meet one of the automatic UK tests or the suf - ficient ties test. The automatic overseas tests If an individual meets any of the following tests they will automatically not be UK tax resident:
• they spend fewer than 16 days in the UK and were UK resident in one or more of the three preceding tax years; • they spend fewer than 46 days in the UK and were not UK resident in any of the three preceding tax years; or • they work, broadly, full-time overseas, with only limited visits to, and workdays in, the UK. The automatic UK tests If an individual does not meet any of the automatic overseas tests they will be automatically UK resident if they meet any of the following tests: • they spend at least 183 days in the UK in the tax year; • they have a home in the UK which is available for a period of 91 consecutive days or more (at least 30 of which must fall within the tax year), and that home is actually used for at least 30 days in the tax year and they either have no overseas home(s), or, if they do, they spend fewer than 30 days in any overseas home in the tax year; or • they work full time in the UK for any 365-day period, part of which falls in the tax year (with no significant breaks). The ties tests If none of the automatic tests are met, an individual will be UK tax resident if they meet the sufficient ties tests. The greater the number of days spent in the UK, the fewer the ties required to be UK tax resident: UK Ties Required if UK Tax Resident in One or More of the Prior Three Tax Years: • 16 to 45 days spent in the UK – at least four ties; • 46 to 90 days spent in the UK – at least three ties; • 91 to 120 days spent in the UK – at least two ties; or • over 120 days spent in the UK – at least one tie. UK Ties Required if Not UK Tax Resident in Prior Three Tax Years: • 46 to 90 days spent in the UK – the first four ties; • 91 to 120 days spent in the UK – at least three ties; or
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