Global mobility landscape and the end of the UK’s non-dom regime

Nicholas Carling, Partner and Natasha Karp, Director of Employer Solutions at Evelyn Partners consider how the abolition of the UK’s non-dom regime will affect the UK’s attractiveness for individuals and employers.

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Nicholas Carling and Natasha Karp
Published: 16 Apr 2024 Updated: 16 Apr 2024
Business tax Tax

An overview of recent key changes

While employers are still waiting for details of the new UK regime for individuals starting UK residence, it is helpful to reflect not only on the recent announcements in the UK but also how other impatriate tax regimes in Europe have evolved over the last year.

Before the UK Spring Budget, 2024 was already proving to be an interesting year with changes to impatriate regimes in a number of European countries, all of which will impact employee mobility throughout the region. In addition, there are a number of forthcoming national elections in 2024 – not least in the UK – which will almost certainly influence tax policy and in turn decisions made by individuals and their employers.


  • Non-domicile regime is to be abolished from April 2025, to be replaced by a new residence based Foreign Income & Gains (FIG) regime which will last for a maximum of four tax years.
  • For employees, overseas workday relief (OWR) remains for the first 3 years of residence but an important change is that foreign earnings will not be taxed even if remitted to the UK.


  • With effect from January 2024, Italy’s impatriate regime introduced a cap on the amount of employment and/or self employment income that is exempt from taxation. Previously a flat rate reduction of 70% or 90% applied on all earnings, this has now been capped at €600,000 of earnings, and the reduction reduced generally to 50%.


  • The 30% regime has been changed, significantly reducing the benefits of the regime. Firstly, the 30% headline exemption has been revised to a 30:20:10 regime whereby the initial 30% relief is phased out over five years. The regime also now incorporates a cap on eligible earnings which will be indexed annually.


  • The Non Habitual Residents tax that prescribed a 20% flat rate tax on Portuguese income and exemption from tax for foreign income and gains for up to 10 years has been abolished with effect from January 2024.
  • The former residents special tax regime that included a 50% exemption from employment income has now been restricted to a maximum exemption of €250,000.
  • A new special tax regime has been created specifically for scientific research and innovation, including employees and board members of certified startups. This provides for a special 20% tax rate on Portuguese income for ten years and applies to taxpayers not covered by the former regimes.

Will the UK’s new FIG and OWR regimes attract employers to send individuals to the UK for work?

The new form of OWR is very competitive compared to regimes in other countries, as there will no longer be a restriction on bringing foreign earnings to the UK. This makes the UK attractive for individuals who qualify and are taking up pan-European or global roles involving a significant amount of work travel.

It is also important to recognise that there is a simplicity to OWR and the qualifying tests only consider the individual’s circumstances whereas in some countries, for example Ireland and France, there are obligations that the employer must meet to enable the individual to benefit from the relevant relief.

Much has been made of the fact the FIG regime is only available for 4 tax years compared to other countries which offer beneficial regimes that last up to ten years in some cases. Clearly, longer term planning is relevant however, in the context of global mobility, typically individual moves are looked at on a 3-year time horizon and hence this fits well with OWR. Nonetheless, some organisations may feel the Government has missed an opportunity both in terms of simplicity and attractiveness by not aligning the years of residence applicable to both OWR and FIG.

It is also important to recognise another significant change under the proposed regime: individuals born in the UK who have lived outside the UK for the last 10 tax years or more are currently taxed on their worldwide income and gains if they come to work in the UK. This has made it difficult for employers to relocate some key talent to the UK from lower tax jurisdictions. However, under the new rules, FIG and OWR will be available even for individuals born in the UK provided they have met the 10 year non-residence condition.

Based on the above, where individuals are being relocated to the UK by their employer under tax equalisation arrangements, the new form of OWR provides a much greater level of certainty of tax costs for the employer and will likely make the UK look competitive compared to other countries.

However, for some industry sectors, notably private equity where a large part of remuneration is in the form of carried interest, the FIG regime – at only 4 years – does not provide the same longevity as some other countries. For example Italy, at 15 years, could be more attractive to some individuals notwithstanding the annual non-dom fee that applies of €100,000.

What do the new rules mean for non-domiciled individuals who are currently resident in the UK?

For individuals who moved to the UK 3 to 15 years ago as at April 2025, the earlier than anticipated move to worldwide taxation could mean that they look to leave the UK. The one year transitional rules allowing a 50% exemption from FIG income in the 2025/26 tax year may not be generous enough to incentivise them to remain in the UK.

The proposals could put pressure on employers to facilitate a move outside of the UK which in some cases might include an international remote working arrangement.

The Temporary Repatriation Facility (TRF) which enables individuals to remit foreign income at a rate of 12% might also be of interest to employees. It is not yet clear whether or not the definition of foreign income includes employment income related to foreign workdays, however, if it does, the 12% rate could encourage individuals to remit these earnings to the UK.

Where any employees claiming the TRF were under a tax equalisation arrangement at the point they received OWR, they may seek tax equalisation or reimbursement from their employer for the tax arising on remittance. As such, employers should review their global mobility policies to ensure they understand the impact of the new rules and any potential tax costs so that they can consider approaches to mitigate this.

There is also an opportunity for individuals to rebase the value of their capital assets to the value as of 5 April 2019. In combination with the TRF regime, this could prove very attractive to employees who hold shares in their employer company. As such, employees will need to be able to identify and obtain a valuation of all shares held at 5 April 2019. Employers who are unlisted companies should ensure they are ready in the likely event they are asked by their employees for a formal valuation.


Given the recent changes in impatriate regimes throughout Europe, the UK’s proposed FIG and OWR regimes could represent a very attractive option for employers looking to move their top talent to the region and also for employees who will welcome the simplicity of the new regimes.

Where an employer has global mobility tax policies already in place, it is important to review the policies and current population of employees in the UK to understand both the opportunities that arise and the potential impacts of the FIG, OWR and various transitional rules.

If you would like to discuss how any of the above could impact your business, please do get in touch with your usual Evelyn Partners contact or the contacts listed.

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This article references impatriate regimes in Italy, Portugal, the Netherlands and France. Please note that Evelyn Partners does not provide tax advice in these jurisdictions. However, as part of our membership of CLA Global and relationships with other international firms we are able to deliver international projects.

By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication.

Tax legislation

Tax legislation is that prevailing at the time, is subject to change without notice and depends on individual circumstances. You should always seek appropriate tax advice before making decisions. HMRC Tax Year 2024/25.