On 6 April 2025 the UK abolished the remittance-basis non-dom regime and removed domicile as the connecting factor for tax (GOV.UK, 2026). Your tax now follows residence, not domicile. So the live question for UK high-net-worth individuals and former non-doms is no longer "where am I domiciled?" but "should I leave, and how do I restructure if I do?" The one-line answer: a UAE structure can be the right destination architecture, but it only changes your tax outcome once you have left the UK cleanly under the Statutory Residence Test and cleared the inheritance-tax tail that now follows you out. This pillar maps the six-stage decision and links down to each detailed step.
For the UK-departure mechanics that sit alongside this hub, see our pillar on moving to Dubai and UAE tax residency.
Key Takeaways
- The non-dom remittance basis ended on 6 April 2025; UK tax is now residence-based under the Finance Act 2025 (legislation.gov.uk, 2026).
- The 4-year FIG regime giving 100% relief is for inbound new arrivals who were non-resident for 10 consecutive years, not for departing long-term residents.
- Inheritance tax now follows a long-term-resident test: UK resident in 10 of the last 20 tax years brings your worldwide estate into UK IHT scope (GOV.UK, 2026).
- Leaving carries a 3 to 10-year IHT tail and a 5-year temporary-non-residence CGT rule, so a quick round-trip to Dubai does not work.
- A DIFC or ADGM Foundation is a succession and holding vehicle, not a UK-tax exemption; the UK exit decides whether the outcome is real.
What changed for UK non-doms on 6 April 2025?
The UK abolished the remittance basis on 6 April 2025 and removed domicile as the connecting factor for income tax, capital gains tax and inheritance tax (GOV.UK, 2026). Tax now follows where you are resident. That single change is why old domicile-planning no longer shelters foreign income while you stay in the UK, and why departure has become the central question.
Three replacements arrived together. A new 4-year Foreign Income and Gains regime gives 100% relief on foreign income and gains for the first four years of UK residence, but only to people who were non-UK-resident for the 10 consecutive prior tax years (GOV.UK, 2026). This matters for a blunt reason. FIG is built for inbound new arrivals. If you are a long-term UK resident thinking of leaving, you do not qualify for FIG, so it is not part of your toolkit.
The second replacement is the Temporary Repatriation Facility. It lets people who used the old remittance basis bring pre-6-April-2025 foreign income and gains onshore at a reduced rate: 12% in 2025/26 and 2026/27, then 15% in 2027/28, across a three-year window (HMRC RDRM73400, 2026). HMRC estimates around 23,000 former remittance-basis users are eligible. The third replacement is the biggest for estate planning: inheritance tax moved to a residence test, covered in the next section.
Citation capsule: On 6 April 2025 the UK abolished the remittance-basis non-dom regime and removed domicile as the connecting factor, moving income tax, CGT and IHT onto a residence basis under the Finance Act 2025 (GOV.UK, 2026; legislation.gov.uk, 2026). The replacement 4-year FIG regime is for inbound new arrivals, not departing long-term residents.
For the definition of non-dom status and the FIG basics in full, see our explainer on UK non-dom status in 2026.
Does the 4-year FIG regime help someone leaving the UK?
No. The 4-year FIG regime gives 100% relief on foreign income and gains, but only to people arriving after 10 consecutive prior non-resident tax years (GOV.UK, 2026). It is an inbound-arrival relief. A long-term UK resident leaving for the UAE has been resident, not absent, so they do not meet the test and do not get FIG.
This distinction trips up a lot of planning. FIG and the inheritance-tax long-term-resident rule both mention "10 years", but they are different tests pointing in opposite directions. FIG counts 10 consecutive years of non-residence before arrival. The IHT rule counts 10 of the last 20 years of residence. One is an entry benefit for newcomers; the other is an exit liability for established residents. Keep them apart.
What does help a leaver is the route, not the relief. Once you become non-resident, you eventually escape worldwide UK income tax and capital gains tax on a current basis, subject to the 5-year temporary-non-residence rule and the inheritance-tax tail. The relief that protects new arrivals does nothing for you. The mechanics that protect a departure are the Statutory Residence Test, the IHT tail and clean timing, set out below.
Citation capsule: The 4-year FIG regime gives 100% relief on foreign income and gains for the first four years of UK residence, but only to arrivals who were non-UK-resident for the 10 consecutive prior tax years (GOV.UK, 2026). It is an inbound-arrival relief, so a departing long-term UK resident does not qualify for FIG.
How do you become UK non-resident cleanly, and why does it come first?
Becoming non-resident comes first because nothing else in the plan works until it is settled. While you remain UK-resident you are taxed on your worldwide income and gains, and a UAE structure changes none of that (GOV.UK, 2026). Residence is decided by the Statutory Residence Test, which weighs days spent in the UK against ties such as family, accommodation and work.
The break has to be real, not a label. A round-trip to Dubai with the family, home and working life left behind in Britain will not pass the test. The SRT counts days and ties precisely, and the capital-gains rules add a second guard: gains realised during a period of non-residence of five years or less are taxed in the year you return (GOV.UK HS278, 2026). The old remittance shelter for those gains disappeared on 6 April 2025. So a sub-five-year departure does not crystallise a clean CGT outcome.
We do not re-explain the SRT mechanics here, because a dedicated guide already owns that ground. Read it before you set a departure date, then return to this hub for the steps that follow your residence change.
Citation capsule: While you remain UK-resident you are taxed on worldwide income and gains, and a UAE structure does not change that (GOV.UK, 2026). Residence is decided by the Statutory Residence Test, and gains realised in a non-residence period of five years or less are taxed in the year of return (GOV.UK HS278, 2026).
For the day-count and ties rules in full, see our guide on UK tax residency and becoming non-resident.
What is the inheritance-tax long-term-resident trap when you leave?
Inheritance tax now follows a long-term-resident test, and it follows you out of the country. You are a long-term resident if you were UK resident in at least 10 of the previous 20 tax years, which brings your worldwide estate into UK IHT scope at 40% rather than only UK-situated assets (GOV.UK, 2026). Leaving does not end that exposure immediately.
A tail runs after departure. The scope persists on a sliding scale: three years for someone with 10 to 13 years of residence, rising by one year for each additional year of residence, up to a maximum of 10 years for those resident 20 years or more (HMRC IHTM47020, 2026). Long-term-resident status only resets after 10 consecutive non-resident years. The nil-rate band stays at GBP 325,000 and the residence nil-rate band at GBP 175,000, both frozen to 5 April 2031.
This is the most expensive thing to get wrong in a UK-to-UAE move. A family can relocate cleanly, set up a flawless UAE structure, and still face 40% UK inheritance tax on a worldwide estate for years afterward if a death falls inside the tail. The planning answer is timing and structure together, not structure alone. There is also a narrow treaty exception for some individuals with an Indian or Pakistani domicile of origin, which is fact-specific and needs advice.
Citation capsule: A long-term resident, defined as UK resident in 10 of the last 20 tax years, has their worldwide estate in UK inheritance-tax scope at 40% (GOV.UK, 2026). After leaving, a tail of 3 to 10 years applies depending on length of residence, and status resets only after 10 consecutive non-resident years (HMRC IHTM47020, 2026).
For the full mechanics of the tail, the treaty exception and worked timing, see our detailed note on UK inheritance tax for former non-doms in 2026.
Do offshore trusts still work after the 2025 reform?
They still work, but they need a review, not panic. The reform removed protected-settlement status with no grandfathering for income and capital gains: a UK-resident settlor of a settlor-interested offshore trust is now taxed on the trust's foreign income as it arises and on gains as they accrue (legislation.gov.uk, 2026). For inheritance tax the picture is different and more forgiving.
The income and IHT positions diverge, and that divergence is the point. On the IHT side, whether non-UK trust assets sit outside the estate now depends on whether the settlor is a long-term resident at each chargeable event, not on domicile. Assets settled while the settlor was not a long-term resident can stay excluded; once the settlor becomes a long-term resident, non-UK trust assets enter the relevant-property regime, with a 20% entry charge above the nil-rate band and up to 6% on each 10-year anniversary. A limited cap protects property that was excluded on 30 October 2024.
So the honest message is calibrated. Existing trusts still serve non-resident settlors, assets settled before long-term-resident status, and non-tax goals such as succession and asset protection. What they no longer do is shelter a UK-resident settlor's foreign income from current tax. The right move is a structured review against your residence position and the dates, not a reflexive wind-up.
Citation capsule: The 2025 reform removed protected-settlement status with no grandfathering for income and CGT, so a UK-resident settlor of a settlor-interested offshore trust is taxed on the trust's foreign income and gains as they arise (legislation.gov.uk, 2026). Inheritance-tax excluded-property status now turns on whether the settlor is a long-term resident at each chargeable event.
For the entry charges, the GBP 5m cap and the grandfathering detail, see our note on UK offshore trust changes in 2026.
Should you choose an asset-protection trust or a UAE Foundation?
It depends on whether you are optimising for litigation defence or for banking and succession, and the two pull in different directions. Hardened asset-protection jurisdictions such as the Cook Islands and Nevis rely on not recognising foreign judgments, which is precisely what protects assets but also signals "haven" to banks and CRS counterparties (Cook Islands International Trusts Act 1984; OECD Common Reporting Standard, 2025). That non-recognition creates real de-risking friction when you open accounts.
A UAE Foundation sits at a different point on the curve. A DIFC or ADGM Foundation gives a common-law firewall against foreign forced-heirship and judgments, 0% UAE tax at the personal level, Sharia-compatible succession and, increasingly, better banking acceptance than the classic haven structures. It is weaker than a Cook Islands trust on pure creditor-defence theory, but stronger on the day-to-day reality of moving and banking money. For most relocating families that trade-off favours the UAE vehicle.
Two cautions apply to every option here. Asset protection is not a tax shelter and does not defeat fraudulent-transfer clawback, and CRS reporting reaches the founder, council, protector and beneficiaries as reportable controlling persons. UK tax also still applies while the settlor is UK-resident or a long-term resident. So the protection layer sits on top of the residence and IHT analysis, never instead of it.
Citation capsule: The non-recognition of foreign judgments that makes Cook Islands and Nevis structures protective also signals "haven" to banks and CRS counterparties, creating de-risking friction, while UAE DIFC and ADGM Foundations carry better banking optics with a common-law firewall and 0% UAE personal tax (Cook Islands International Trusts Act 1984; OECD Common Reporting Standard, 2025). Asset protection is not a tax shelter and CRS reporting still applies.
For the jurisdiction-by-jurisdiction comparison, see our guide on offshore asset-protection trusts in 2026, and for the UAE internal choice, DIFC vs ADGM Foundation.
Is a Family Investment Company or a Foundation the better wrapper?
Each suits a different goal, and confusing them is costly. A Family Investment Company is a company taxed at 25% corporation tax above GBP 250,000 of profit and 19% below GBP 50,000, with dividends received by the company exempt from corporation tax (legislation.gov.uk, 2026). It compounds capital efficiently inside the wrapper, but extracting profit is taxed twice: corporation tax, then dividend tax of up to 39.35%.
Here is the point sales material skips. A FIC is not an inheritance-tax silver bullet. The shares sit inside the shareholders' estates and attract 40% IHT on death, with a minority discount possible but no exemption. The IHT benefit comes from the gift of shares under the seven-year rule plus freezing growth into a separate share class, not from the corporate wrapper itself. There is no Business Property Relief and no CGT holdover on gifting the shares.
A Foundation works differently. It can hold assets outside the founder's estate for succession and protection, with the relevant-property charges where applicable, and it carries no income-extraction double charge in the UAE context. The choice turns on whether you are optimising for tax-efficient compounding and family income, where a FIC can fit, or for succession, asset protection and getting value out of your estate, where a Foundation often fits better.
Citation capsule: A Family Investment Company is taxed at 19% to 25% corporation tax and its shares sit inside the shareholders' estates, attracting 40% inheritance tax on death, so the IHT benefit comes from the gift of shares and the seven-year rule, not the corporate wrapper (legislation.gov.uk, 2026). A FIC is not an inheritance-tax silver bullet.
For the full side-by-side, see our comparison of the Family Investment Company versus the Foundation.
What does the UAE side of the restructuring look like?
The UAE is the destination architecture, and its appeal is structural as well as fiscal. It levies 0% personal income tax, with no tax on salary, investment income, dividends or capital gains at the individual level (PwC, 2026). DIFC and ADGM common-law Foundations give succession and asset-protection wrappers inside that tax environment. The pull is real, but it sits at the end of the spine, not the start.
Direction of travel supports the picture, with one caveat. Henley & Partners forecasts a UK net loss of 16,500 millionaires in 2025, the highest on record, and a UAE net inflow of 9,800, ranking it first in the world ahead of the USA at 7,500 (Henley & Partners, 2025, forecast). Treat these as forecasts from a firm that sells migration, not recorded HMRC or ONS departures. They show direction, not a headcount.
The honest framing to close on is the order. A UAE Foundation or holding company is the place your wealth lands, and it does that job well: 0% personal tax, common-law courts, strong succession tools. But it does not erase UK tax while you remain UK-resident, and it does not shorten the inheritance-tax tail. The UK exit, the Statutory Residence Test, the IHT tail and the 5-year CGT rule, decides whether the tax outcome is real. Build the destination, but settle the departure first.
Citation capsule: The UAE levies 0% personal income tax on salary, investment income, dividends and capital gains at the individual level (PwC, 2026), and Henley & Partners forecasts a UAE net inflow of 9,800 millionaires in 2025 against a UK net loss of 16,500 (Henley & Partners, 2025, forecast). These are forecasts, not recorded departures, and a UAE structure does not erase UK tax while you remain UK-resident.
For the UAE structures in detail, see our guides on the UAE holding company and DIFC vs ADGM Foundation, and on the move itself, moving to Dubai and UAE tax residency.
Where to take this next
The restructuring decision has a fixed order: leave cleanly, clear the tail, then build the destination. A UAE Foundation or holding company is a strong place for wealth to land, but it is the last step, not the first. The figures that decide whether your move actually changes your tax are UK figures: the Statutory Residence Test, the 10-of-20 long-term-resident rule, the 3 to 10-year inheritance-tax tail and the 5-year temporary-non-residence CGT rule. Get those right and the UAE structure does its job. Get them wrong and the structure is just paperwork over an unchanged UK liability.
If you are weighing departure and UAE restructuring, map your residence position, your IHT tail and your asset structure together before you commit to a date or a vehicle. You can talk to Ancova's private-wealth team about protecting and restructuring your wealth for a co-ordinated view across the UK exit and the UAE destination.
This is general information current to June 2026 and not personalised advice. UK tax is fact-specific and the rules are recent, so take regulated advice before acting.
Frequently asked questions
What are the main UK non-dom alternatives after the 2025 abolition?
The remittance basis ended on 6 April 2025, so the alternatives are residence-based: leave the UK cleanly under the Statutory Residence Test, use the Temporary Repatriation Facility at 12% to 15% for pre-2025 income, and restructure through trusts, a Family Investment Company or a UAE Foundation (GOV.UK, 2026). Structure follows residence, not the reverse.
Does moving to Dubai remove my UK tax?
Not by itself. While you remain UK-resident you are taxed on worldwide income and gains, and a UAE structure changes nothing (GOV.UK, 2026). You must become non-resident under the Statutory Residence Test, clear the 3 to 10-year inheritance-tax tail, and pass the 5-year temporary-non-residence rule before the move changes your tax position.
Can a departing long-term UK resident claim the 4-year FIG relief?
No. The 4-year FIG regime gives 100% relief on foreign income and gains, but only to arrivals who were non-UK-resident for the 10 consecutive prior tax years (GOV.UK, 2026). It is an inbound-arrival relief, so a long-term UK resident leaving for the UAE does not qualify for FIG.
How long does UK inheritance tax follow me after I leave?
Between three and ten years. If you were UK resident in 10 of the last 20 tax years you are a long-term resident, and after leaving your worldwide estate stays in UK IHT scope on a sliding tail: three years for 10 to 13 years of residence, up to ten years for 20 years or more (HMRC IHTM47020, 2026). Status resets after 10 consecutive non-resident years.
Is a UAE Foundation a UK-tax exemption?
No. A DIFC or ADGM Foundation is a succession and asset-protection vehicle, not a UK-tax exemption (PwC, 2026). It offers 0% UAE personal tax and a common-law firewall, but UK tax still applies while you are UK-resident or inside the inheritance-tax tail. The UK exit, not the Foundation, decides the tax outcome.
Sources
- GOV.UK / HMRC, "Changes to the taxation of non-UK domiciled individuals," retrieved 13 June 2026, https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals
- GOV.UK, "Check if you can claim the 4-year foreign income and gains (FIG) regime," retrieved 13 June 2026, https://www.gov.uk/guidance/check-if-you-can-claim-the-4-year-foreign-income-and-gains-fig-regime
- HMRC, "Residence, Domicile and Remittance Basis Manual RDRM73400 (Temporary Repatriation Facility)," retrieved 13 June 2026, https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm73400
- GOV.UK, "Inheritance Tax if you're a long-term UK resident," retrieved 13 June 2026, https://www.gov.uk/guidance/inheritance-tax-if-youre-a-long-term-uk-resident
- HMRC, "Inheritance Tax Manual IHTM47020 (long-term residence tail)," retrieved 13 June 2026, https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm47020
- GOV.UK, "Temporary non-residents and Capital Gains Tax (HS278)," retrieved 13 June 2026, https://www.gov.uk/government/publications/temporary-non-residents-and-capital-gains-tax-hs278-self-assessment-helpsheet
- legislation.gov.uk, "Finance Act 2025," retrieved 13 June 2026, https://www.legislation.gov.uk/ukpga/2025/8/contents
- PwC Tax Summaries, "United Arab Emirates: Taxes on personal income," reviewed 12 March 2026, retrieved 13 June 2026, https://taxsummaries.pwc.com/united-arab-emirates/individual/taxes-on-personal-income
- Henley & Partners / New World Wealth, "Private Wealth Migration Report 2025" (forecast figures from a private advisory firm), retrieved 13 June 2026, https://www.henleyglobal.com/publications/private-wealth-migration-report-2025
Written by
Amine Derag
Director of Strategy, Ancova Associates
Amine Derag is Director of Strategy at Ancova Associates, the Dubai advisory firm for company formation, residency, citizenship by investment, and cross-border tax structuring. He advises founders and private clients relocating to the UAE on how a UAE structure interacts with their home-country tax and reporting obligations.
Connect on LinkedInThis article is general information for educational purposes only and is not legal, tax, financial, or immigration advice. Investment thresholds, processing times, and program terms change — speak with a qualified Ancova adviser before acting.
