Getting the best from your wealth means being aware of how it’s taxed, and how it might potentially be taxed in the future. If you’re frequently travelling, then there are a number of rules and principles worth adhering to.
The Post‑Non‑Dom Landscape: What Changed and What It Means for Travellers
From April 6th 2025, domicile ceased to be a relevant factor when calculating income tax and capital gains tax. The incoming Foreign Income and Gains (FIG) rules, which apply to qualifying new residents of the UK, grant up to four years tax relief on income from foreign sources.
If you want to bring your overseas affairs into the UK, then you can take advantage of transitional rules, like the Temporary Repatriation Facility (TRF). This three-year window allows you to bring foreign income and gains into the UK at a reduced rate.
Intelligent Tax Structuring: Leveraging FIG, OWR and TRF
To get the best from the FIG three-year window, proper planning is essential. In practice, the FIG clock starts ticking from the moment a taxpayer becomes resident in the UK. This means leaving the country means skipping a year of entitlement.
Overseas Workday Relief (OWR) is available for those looking to earn money overseas. This means a simplified process for managing cash, as it eliminates the advantage of keeping money offshore. Through structured employment contracts, more duties can be taken abroad in order to get the best from OWR. Bear in mind, however, that just a single workday taken abroad could end up compromising an entire year of relief. Thus, careful record keeping and real-time payroll updates can be critical.
Naturally, optimising your tax affairs requires an expert set of eyes, especially if those affairs are complex. This is where a competent full-service law firm might make a big difference.
International Structuring and Compliance: Balancing Tax Efficiency and Reputation
Digital nomads and other travellers might have a particular interest in optimising their tax affairs, particularly if their income comes from many different sources.
Note that from April 2025, there’s no longer such a thing as ‘protected’ trust status. Trusts should be established, ideally, before FIG expires, in order to protect assets. The window can be used to distribute assets in a way that’s tax-efficient.
If you’re concerned about your reputation, then transparency is critical. A failure to report an offshore structure may be perceived as a red flag. This could draw scrutiny, and negative publicity, which can damage your reputation, even if no wrongdoing is found.
Recent UK Developments: What the Numbers Show and the Global Competitive Picture
After the changes to the rules, it was widely feared that the UK would see an exodus of wealthy individuals. Early signs suggest that those fears were slightly exaggerated.
The UK’s major competitors are in the Middle East. The UAE offers fast residency routes and very low personal income tax, while the United States offers competitive tax rates and a welcoming culture. Both nations have brought considerable foreign investment in recent times, partly as a response to recent reforms.
