Please note: At the Spring Budget 2024, the former government announced significant changes for UK-resident taxpayers to the taxation of non-UK income and gains arising from April 2025. Under these proposals, the taxpayer’s domicile and the remittance of such income and gains to the UK would no longer be relevant in determining the UK income tax liability. Instead, taxpayers would be able to exclude such income and gains from UK tax for a limited period, where certain conditions are met. The information below sets out the position for the 2024/25 tax year.

Updated on 6 April 2025

Residence and domicile

Your tax residence status affects the extent to which you are liable to tax in the UK. For tax years up to and including 2024/25, your domicile status is also relevant.

2 model houses, one a residence, the other a holiday home.
Roberts Photography / Shutterstock.com

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Overview

Tax residence is a short-term concept and is determined for each tax year separately, broadly reflecting where you reside.

Domicile is more long-term and refers to the country which you consider to be your permanent ‘home’ over the course of your life. Your domicile is only relevant for tax years up to and including 2024/25.

The two are usually considered independently, though in some cases for tax years up to and including 2024/25, if you are long-term resident in the UK then you can be deemed UK domiciled.

The following table summarises the income tax and capital gains tax impact of your residence and domicile status for tax years up to and including 2024/25:

  Resident Non-resident
UK domiciled Taxable on worldwide income and gains (known as the arising basis) Taxable on UK-sourced income and gains on certain UK assets.
Non-UK domiciled Taxable on worldwide income and gains unless the remittance basis applies, in which case unremitted foreign income and gains are excluded from UK tax.

This is the position under UK domestic law. There may be different treatment for particular types of income and gains under the terms of a relevant double taxation agreement.

For tax years up to and including 2024/25, your domicile status is also relevant for inheritance tax purposes.

Regardless of your residence or domicile status, income which arises in the UK is generally taxable in the UK. For example, migrant workers are subject to UK tax on their UK earnings, whether or not they are resident in the UK. So, if you are in the UK temporarily and you only have UK income while you are here, it may not matter much whether or not you are tax resident: all of your income will be subject to UK tax in any case.

Your residence status and, for tax years up to and including 2024/25, domicile status are therefore most relevant for determining the extent to which any foreign (that is, non-UK) income, and certain gains, are taxed in the UK.

For tax years up to and including 2024/25, your domicile status is normally only relevant if you are resident here; if you are non-resident then your foreign income and gains are out of scope of UK tax.

Most people who were born in the UK and have lived in the UK most or all their lives will be resident and domiciled in the UK.

However, most people who come to the UK to live here for at least six months but do not intend to remain here permanently, or otherwise retain ties to their home country, will usually become resident here but retain a non-UK domicile. Alternatively, if you only come to the UK for a short period, or do not spend very much time in the UK, then you may not become resident here at all.

New rules from 2025/26 onwards

For tax years from 2025/26 onwards, your domicile is ignored in determining your liability to UK tax and the remittance basis is abolished. Instead, taxpayers meeting certain residence conditions may claim relief from UK tax for a limited period on their foreign income and/or gains. We explain more about this relief at Foreign income and gains from 6 April 2025.

If this relief is not claimed, non-domiciled taxpayers who are resident in the UK are taxable on their worldwide income and gains from 2025/26 like any other UK resident taxpayer.

If you are resident in the UK from 6 April 2025 and the remittance basis applied to you for a prior tax year, then your foreign income and gains for that prior year may still be taxable in the UK if they are remitted to the UK after 6 April 2025. However, for a limited period, such income can be ‘designated’ under the Temporary Repatriation Facility. This means you would pay a special low rate of tax on the income and no further tax would be payable if the income is later remitted to the UK.

Tax allowances

Your residence status may also affect your entitlement to certain UK income tax allowances, including the personal allowance. This can therefore affect the amount of UK tax you owe.

If you are entitled to the UK personal allowance, this is not reduced where you are only in the UK for part of the tax year. Therefore, for the tax year of arrival and the tax year of departure, where you are generally only taxable in the UK for part of the year, you may be entitled to a tax refund (see, for example, UK tax refunds for people leaving the UK or living overseas). This may be the case if you have not received the benefit of the full personal allowance through your pay as you earn (PAYE) tax code applied to your employment income.

However, if you claim the remittance basis (and it does not apply automatically) for tax years up to and including 2024/25, you will forfeit the UK personal allowance, as well as the capital gains tax annual exempt amount.

Similarly, for tax years 2025/26 onwards, if you make a foreign income claim, foreign employment election (also known as overseas workday relief) or foreign gain claim, in each case you will lose entitlement to both the UK personal allowance and the capital gains tax annual exempt amount. See Foreign income and gains from 6 April 2025 for further information.

More information

You can find more information on residence and domicile in HMRC’s Residence, Domicile and Remittance basis guidance (RDR1).

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