The non-dom inheritance tax changes replaced domicile with a residence test from 6 April 2025. A person resident in the UK for at least 10 of the previous 20 tax years is now a long-term resident and is taxed on worldwide assets, not only UK ones. Most guides explaining this were written before the Autumn Budget of 26 November 2025, so they miss the extended freeze and the corrected relief figures below.
What are the non-dom inheritance tax changes?
Before the change, a non-domiciled resident paid UK inheritance tax only on UK-situated assets, unless they had been UK resident for 15 of the past 20 years and so became deemed domiciled. Non-UK assets sat outside the net.
Now the connecting factor is residence. Once you are a long-term resident, your assets anywhere in the world can face the 40% charge on death, subject to the same nil-rate bands and exemptions that apply to everyone.
| Test | Before 6 April 2025 | From 6 April 2025 |
|---|---|---|
| What decides worldwide scope | Domicile, or deemed domicile after 15 of 20 years | Long-term residence: 10 of the last 20 tax years |
| Non-doms below the threshold | Taxed on UK assets only | Taxed on UK assets only |
| After the threshold is met | Worldwide assets in scope | Worldwide assets in scope, three years sooner |
Source: gov.uk, reforming the taxation of non-UK domiciled individuals, as at August 2026, subject to change.
Who is a long-term UK resident for inheritance tax?
The count uses complete tax years, each running from 6 April to 5 April. A shorter modified test applies to anyone who dies or makes a transfer before age 20, based on being resident for at least half the tax years since birth.
UK-situated assets were always within UK inheritance tax and remain so, regardless of residence or domicile. A property in England or Wales, for example, is in scope from the first year of ownership.
Source: gov.uk and the Statutory Residence Test (RDR3), as at August 2026, subject to change.
Are you caught, and for how long does it last after you leave?
- Count your UK-resident tax years in the last 20. Use complete tax years, 6 April to 5 April, and the Statutory Residence Test for each. Ten or more means you are a long-term resident now.
- Check your UK assets separately. A home or other asset situated in England or Wales is inside UK inheritance tax whatever your residence count says, so it is taxed either way.
- If you have left or plan to leave, find your tail. The tail is how many tax years abroad your worldwide estate stays in scope. Read it from the table below against your years of residence.
- Note the pre-2025 transitional rule. If you stopped being UK resident before 6 April 2025, you keep the old three-year tail if you were deemed domiciled, and no tail if you were not, whatever your later residence count.
| UK-resident tax years (of last 20) | Tail after leaving the UK |
|---|---|
| 10 to 13 years | 3 tax years |
| 14 years | 4 tax years |
| 15 years | 5 tax years |
| 16 to 19 years | 6 to 9 tax years (one more per year) |
| 20 years | 10 tax years (the maximum) |
So a person resident for 12 years stays in worldwide scope for 3 tax years after leaving, while someone resident for the full 20 years carries the maximum 10-year tail. During the tail, non-UK assets remain taxable; once it ends, only UK-situated assets stay in scope.
Source: gov.uk, reforming the taxation of non-UK domiciled individuals, as at August 2026, subject to change.
How do the non-dom changes affect gifts and the spouse exemption?
The seven-year rule and taper on the tax work as they do for everyone: if you die within seven years of a gift, it can be brought back into account, with taper reducing the tax after three years. The non-dom change sits on top of this, deciding whether a gift of non-UK assets counts at all, judged by your status on the day you made it.
A gift where you keep a benefit, known as a gift with reservation, is treated differently. Non-UK property you give away but continue to benefit from is counted as part of your estate if you are a long-term resident when you die, whatever your status was when you made the gift.
Transfers between spouses and civil partners are exempt without limit only where the person receiving is a long-term UK resident. Where a long-term resident leaves assets to a spouse who is not, the exemption is capped, though that spouse can elect to be treated as a long-term resident to remove the cap. We set out the mechanics in how much you can gift tax free and how taper relief works.
Source: HMRC IHTM47060, gifts with reservation and IHTM47038, spousal elections, as at August 2026, subject to change.
How are trusts and excluded property affected?
This is a significant shift for internationally mobile families who used excluded property trusts under the old domicile rules. Trusts set up before the change are affected by the settlor's ongoing residence, not only their status when the trust began.
The interaction of settlor residence, exit charges and the ten-yearly regime is detailed, and it often needs specialist trust and tax input. We set out the wider picture in using trusts in estate planning and cross-border estate planning.
Source: gov.uk, reforming the taxation of non-UK domiciled individuals, as at August 2026, subject to change.
What did not change, and what else is changing?
The Autumn Budget of 26 November 2025 extended the freeze on the £325,000 nil-rate band, the up to £175,000 residence nil-rate band and the £2,000,000 taper threshold until 5 April 2031, a year later than the previously stated 2030. The residence band is still withdrawn by £1 for every £2 an estate exceeds £2,000,000. Guides written before that Budget often say 2029-30 or 2030.
| Figure | Position as at August 2026 |
|---|---|
| Nil-rate band | £325,000, frozen until 5 April 2031 |
| Residence nil-rate band | Up to £175,000, frozen until 5 April 2031 |
| Standard rate | 40%, or 36% if 10%+ of the estate goes to charity |
| Taper threshold | £2,000,000, residence band withdrawn £1 per £2 above it |
Source: gov.uk, Inheritance Tax and the Autumn Budget 2025, as at August 2026, subject to change.
Two further reforms can matter for the same households. From 6 April 2026, Agricultural and Business Property Relief give 100% relief on the first £2,500,000 of combined qualifying value per person, transferable to £5,000,000 per couple, with 50% relief above that; older summaries still cite a £1,000,000 cap, which was superseded on 23 December 2025. From 6 April 2027, most unused pension funds are brought inside the estate. The full timeline sits in UK inheritance tax reforms 2024 to 2027.
Source: gov.uk, Agricultural Property Relief and Business Property Relief reforms and the gov.uk pensions technical note, as at August 2026, subject to change.
What should you do now?
For families already settled here with a UK home, the residence rules may change little, and the frozen bands and the 2027 pension change are usually the larger concern. These checks normally fold into wider estate planning and a review of how inheritance tax works for your estate.
For a discreet review of your position, you can book a consultation or see our fixed pricing.
Frequently asked questions
What are the non-dom inheritance tax changes?
From 6 April 2025, domicile no longer decides UK inheritance tax on worldwide assets. A residence test applies instead: a person UK resident for at least 10 of the previous 20 tax years is a long-term resident and is taxed on their worldwide estate. Those below the threshold are generally taxed only on UK-situated assets.
When did the non-dom inheritance tax changes take effect?
The changes took effect from 6 April 2025, the first day of the 2025-26 tax year. They followed the earlier announcement to abolish the remittance basis and the old domicile-based inheritance tax rules, replacing deemed domicile with the new long-term resident test.
Does domicile still matter for inheritance tax?
Not for deciding whether worldwide assets are taxed. Since 6 April 2025 that is governed by long-term residence, being UK resident for 10 of the last 20 tax years. Domicile can still be relevant in limited areas, such as certain double tax treaties, but it no longer drives the main worldwide-scope test.
How long do worldwide assets stay in scope after leaving the UK?
Between 3 and 10 tax years, depending on how long you were resident. Residence for 10 to 13 years gives a 3-year tail, and each further year of residence adds one more year to the tail, up to a maximum of 10 years for someone resident for the full 20 years.
Are trusts affected by the non-dom inheritance tax changes?
Yes. From 6 April 2025, whether non-UK trust assets are excluded property depends on the settlor being a long-term resident, not their domicile when the trust was made. If a settlor stops being a long-term resident and the assets become excluded property, this can trigger an inheritance tax exit charge capped at 6%.
Do the changes affect my UK home?
A home situated in England or Wales is within UK inheritance tax regardless of residence or domicile, and always was. The non-dom changes mainly affect non-UK assets. Your UK property is taxed in the same way whether or not you are a long-term resident.
Can my spouse be treated as a long-term resident?
Yes. A spouse or civil partner who is not a long-term UK resident can elect to be treated as one, so that transfers to them are fully exempt from inheritance tax. The election cannot be revoked and lapses only after that person has been non-UK resident for 10 consecutive tax years.
What happened to the remittance basis?
The remittance basis was abolished from 6 April 2025 and replaced with a four-year foreign income and gains regime for new UK arrivals. That is an income and capital gains change. The inheritance tax change is the separate move from domicile to the long-term resident test on the same date.