Where to Next for the UK’s Non-Doms?

With sweeping changes to non-dom rules in the UK, many high-net-worth individuals (HNWIs) are exploring alternative low-tax jurisdictions across Europe and beyond. The UK government’s recent announcements indicate that changes to non-dom status will apply from 6 April 2025, impacting income tax, capital gains tax, and inheritance tax.

As the global tax landscape becomes increasingly competitive, here’s a breakdown of some of the best low-tax destinations for UK non-doms considering a move.

Starting from 6th April 2025, the UK government will replace the current remittance basis of taxation with a residence-based system. For new arrivals, there will be a four-year tax exemption on foreign income and gains. However, changes to capital gains tax are still under discussion, with predictions of alignment with income tax rates.

This shift has sparked interest among non-doms and HNWIs to explore more tax-friendly alternatives abroad. Let's take a closer look at some of those options.

What's Changing for UK Non-Doms?

Spain: The ‘Beckham Law’

Spain’s impatriate tax regime, known as the ‘Beckham Law’, offers a flat 24% tax on Spanish-sourced income up to €600,000 (£500,000), while non-Spanish income remains exempt. This regime lasts up to six years, making Spain a strong contender for those looking for short-term tax benefits.

Switzerland: Lump-Sum Taxation (Forfait Fiscal)

Switzerland remains a top destination for HNWIs due to its stability and favorable tax environment. Many Swiss Cantons offer lump-sum taxation deals, taxing individuals based on their living expenses rather than income. This option is ideal for those who have not lived in Switzerland for the past 10 years and are not employed within the country.

Italy: Flat Annual Tax for HNWIs

Italy’s flat tax regime is another appealing option. HNWIs can benefit from an annual lump sum of €200,000 (£168,000) and exemptions on specific capital gains. To qualify, individuals must not have been tax residents in Italy for at least nine of the last 10 years.

Greece: Low-Tax Non-Dom Regime

Greece offers a similar system to Italy, with a lump-sum tax of €100,000 (£84,000) per year on foreign income. To qualify, individuals must have been non-tax residents in Greece for seven of the last eight years and invest €500,000 (£420,000) in Greek assets.

Cyprus: Non-Dom Benefits

Cyprus boasts a highly attractive non-dom regime. There’s no tax on foreign dividends, and capital gains are exempt even if remitted. This makes Cyprus a top choice for those seeking to protect international income.

Malta: Favorable Non-Dom Taxation

Like Cyprus, Malta provides significant tax benefits for non-doms. Foreign-source income and gains are exempt, with gains not taxed even if remitted to Malta.

Options Beyond Europe including UAE: A Growing Financial Hub

Outside Europe, the UAE is increasingly popular among HNWIs. Dubai, in particular, has become a hotspot for the wealthy due to its booming financial services and crypto sectors. The UAE also boasts an extensive tax treaty network, making it a top destination for tax-efficient relocation.

Top Low-Tax Jurisdictions in Europe and beyond

As the UK government tightens its tax rules for non-doms, many HNWIs are seeking alternative jurisdictions that offer more favorable tax regimes. Whether in Europe or beyond, these destinations provide excellent opportunities for wealth preservation and growth. Exploring these options can help UK non-doms navigate the changing tax landscape effectively.

At The Tax Faculty we are highly experienced in all aspects of tax planning. Contact us today to schedule a free consultation and take the first step towards organising your tax obligations in a way that is as stress-free as possible.

Final Thoughts

Capital Gains Tax Expertise: The Tax Faculty LLP Managing Partner Charles Tateson Named UK Capital Gains Tax Advisor of the Year 2023

The Finance Monthly Taxation Awards recognises the achievements of tax professionals from around the globe.

Winning such an award is no small feat. It is a reflection of hard work, extensive knowledge, and an ability to navigate the intricacies of the UK tax system.

Read more about Charles and the award here.

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