I have worked out of London since 2006. Twenty years in the same city, through the financial crisis, through Brexit, through a pandemic, through more Budgets than I care to remember. My firm has advised international clients from here since 2006 in the UK and since 2008 in the US. London is not a market I analyse from a distance. It is my home ground.
Which is why I want to be precise about what happened on 6 April 2025, because a great deal of nonsense has been written about it since. On that day the United Kingdom abolished the non-dom regime, the remittance basis that had made London the default city for internationally mobile wealth for more than two centuries. I wrote an angry piece when the decision was made. This is not that piece. Sixteen months on, this is an accounting: what actually applies now, who actually left, who still arrives, and what I tell clients who ask me whether London still works.
What Actually Applies Now: The Four Year FIG Window
The replacement is called the Foreign Income and Gains regime, FIG for short, and it is worth understanding properly because most commentary gets the details wrong.
Under HMRC's own guidance, you are a qualifying new resident if you are in one of your first four tax years of UK residence after a period of at least ten consecutive tax years of non-UK residence. For those four years you can claim relief on your foreign income and foreign gains, and here is the part people miss: the relief applies whether or not you bring the money into the UK. The old remittance basis punished you for remitting. FIG does not care. During the window you can spend your offshore dividends on a house in Notting Hill and pay no UK tax on them.
The costs are real, though. You must claim each year through self assessment, and every year you claim, you forfeit your personal allowance and your capital gains annual exempt amount. Unused years cannot be carried forward. And when year four ends, the door closes completely: worldwide income and gains, fully taxable, no transition, no taper. There is also a detail I find genuinely funny: members of the House of Commons and House of Lords are excluded from the regime. Parliament wrote a tax break and carefully locked itself out of it.
For those with money still parked offshore from the old days, the Temporary Repatriation Facility lets pre-2025 foreign income and gains come onshore at a flat 12 per cent in the first two years, rising to 15 per cent before the facility closes in April 2028. It is, in effect, a farewell discount on the old system.
My honest read: the FIG window is cleanly designed and, for four years, more generous than the remittance basis ever was. But four years is a project, not a life. The old regime let you build a family, a firm, and a fortune in London over decades. The new one gives you a fixed term lease.
The Bigger Change: Inheritance Tax Now Follows You
The income tax story took the headlines. The inheritance tax story is what actually moves my clients.
From 6 April 2025, IHT stopped caring about domicile and started caring about residence. Under the new long-term resident rules, once you have been UK resident for at least ten of the previous twenty tax years, your worldwide estate is in scope for UK inheritance tax at 40 per cent. Not your UK assets. Everything, everywhere.
And then there is the tail. Leaving does not switch it off. Once you are a long-term resident, you remain within the UK IHT net for a minimum of three tax years after departure, and that tail grows by one year for each additional year of residence beyond thirteen, up to a maximum of ten. A client who has spent twenty years in London remains exposed to UK inheritance tax on his worldwide estate for a full decade after he has handed back the keys.
Under the old rules, a non-dom could live in London for years while his foreign estate stayed outside the UK net, and trusts settled before deemed domicile locked that protection in. That architecture is gone. For a certain profile of client, families with substantial assets abroad and adult children who will inherit them, this single rule ended the London conversation. The income tax was negotiable. A 40 per cent claim on the family's global estate was not.
The Leavers: What the Numbers Actually Show
Now to the exodus, and here I want to be more careful than the newspapers, because the honest picture is messier than either side admits.
What we know comes largely from HMRC's own statistics, which currently run to the final year before abolition. In 2024/25, the last year of the old regime, the number of non-dom taxpayers fell by a net 1,200 to 81,900. Around 9,000 non-doms left the UK that year, against 11,200 the year before, and new arrivals fell from 10,000 to 8,600. Remarkably, the group still paid £9.7 billion in tax, the highest figure in records going back to 2008, as reported by The National from the HMRC data. High profile names have gone, among them Checkout.com founder Guillaume Pousaz and the businessman Nassef Sawiris.
What we do not yet know is how many left after the reform actually took effect. The government itself says reliable estimates for 2025/26 will only be publishable next year. Into that data vacuum has stepped a cottage industry of dramatic forecasts, most famously the claim that 16,500 millionaires would leave the UK in 2025, a figure I have written about sceptically before because it rests on survey methodology rather than migration data.
So my qualitative summary, and I am deliberately not inventing numbers here: the departure is real, it is concentrated at the very top of the wealth distribution, it began before abolition day, and its full scale will only be visible in next year's statistics. What I can report from my own desk is this: in twenty years of practice, 2025 was the first year in which our firm advised on more UK exits than UK arrivals, and 2026 is running the same way.
Who Still Comes
London is not empty, and it would be dishonest to pretend otherwise. Three groups still arrive, and for them the new rules genuinely work.
First, the four-year-window players. If your wealth sits offshore and you have a defined project, a fund to raise, a company to scale, a liquidity event already on the calendar, the FIG window is arguably the best deal London has ever offered: full access to your foreign income and gains, remitted freely, for four years. I see private equity partners, fund managers, and founders with foreign asset bases treating London exactly this way. They arrive with a departure date already pencilled in.
Second, the Americans. A US citizen is taxed by Washington on worldwide income wherever he lives, so the old remittance basis was never the main attraction. For an American executive or founder doing a London chapter, the FIG years line up neatly with a posting, and London remains the only European city that feels like a peer of New York. The Americans never came for the non-dom regime. They came for the city, and they still do.
Third, entrepreneurs whose business is genuinely British. UK source profits were always taxable, under the old regime and the new one alike. If your market, your team, and your revenue are here, abolition changed very little. These people come for the courts, the capital markets, the talent pool, and the language, and those assets did not move to Milan.
Where the Leavers Go
The destinations are remarkably consistent across our mandates.
Malta runs the last true remittance-basis non-dom regime in the EU, and it does something even the old UK system never did: foreign capital gains stay untaxed even when you bring them in. For British families who want the structure they just lost, plus English and EU membership, it is the natural first conversation.
Italy sells certainty at a price that keeps changing. The flat tax for new residents started at €100,000 in 2017. Decree Law 113/2024 doubled it to €200,000 for anyone moving after 10 August 2024, and the 2026 Budget Law raised it again to €300,000, with €50,000 per family member, for residence taken up from 1 January 2026. Existing participants keep their old rate, which is decent of Rome, but three prices in nine years tells you something about repricing risk, and I have written before about the regime's traps.
The UAE offers the bluntest proposition: no personal income tax at all, and Dubai has spent two decades building the infrastructure to absorb exactly this wave. And Switzerland quietly collects the most conservative families through lump-sum taxation, negotiated canton by canton: expensive, discreet, and above all stable, which after the last two years of British tax policy is precisely the point.
Every one of these moves, incidentally, has to be planned around the rules of leaving as much as the rules of arriving: exit charges, the IHT tail I described above, and the timing of the break in residence. Leaving badly can cost more than staying.
My Assessment: Talent Capital, Tax Argument Gone
Here is where I land, as someone who chose this city twenty years ago and has not left.
London does not die. It absorbed the loss of empire, the Big Bang, Brexit, and a pandemic, and it remains the talent capital of Europe by any honest measure: the deepest capital markets in the time zone, the commercial courts the whole world contracts into, the universities, the English language, the sheer gravitational pull of the place. None of that was repealed in April 2025.
But the tax argument is gone. Completely. For two centuries, London could say to the world's wealth: come, and your foreign fortune is your own business. No other global city could match that sentence, and now London cannot say it either. What remains is a four-year offer with a hard stop and a 40 per cent claim on your worldwide estate if you overstay your welcome by a decade. London now competes on everything except tax, and for a meaningful slice of the people who used to come, tax was the tiebreaker.
There is one symmetry worth noting as I close. The same ten-year clock that qualifies a newcomer for FIG also resets for a leaver. The client I help out of the UK this year becomes, in ten years of non-residence, a qualifying new resident again. Some of them have noticed. London may yet get its people back, on a lease this time rather than a freehold.
Work with Sebastian
If the end of the non-dom era affects you, whether you are planning a move into the UK under the FIG window, an exit with the inheritance tax tail in mind, or a restructuring in Malta, Italy, the UAE or Switzerland, this is exactly the work my firm has done from London for twenty years. Book a consultation.
