The United Kingdom is abandoning its non-dom taxation status after more than 100 years of allowing non-domiciled residents to avoid paying tax on foreign-sourced income. As of April 6, 2025, new non-domiciled residents will pay no tax on foreign-sourced income and gains for only the first four years, provided they have not been a UK tax resident in any of the previous 10 years. Existing non-doms have been granted a two-year transition phase, after which they will be taxed on all worldwide income.
This change has resulted in significant shifts, with high earners leaving the country in record numbers. More than 10,000 millionaires gave up UK residence in 2024 rather than compromise on tax efficiency. Choosing a new tax residency can be complex, involving considerations like golden visas, residency permits, and permanent homes.
Ireland has developed a reputation as one of the EU’s most business-friendly countries, partly due to its low corporate taxes and non-dom taxation regime. Income sourced in or remitted to Ireland is taxed, but all other foreign-sourced income is tax-free. Ireland’s non-dom status has no time limit, and UK citizens can live, work, and study in Ireland without any form of visa thanks to the Common Travel Area agreement.
Malta has long been an attractive base for high-earning foreigners. There’s no inheritance tax, gift tax, or wealth tax, and it offers various corporate tax breaks and incentives for investors.
Tax prompts exodus of millionaires
Malta’s non-dom taxation scheme ensures you won’t be taxed on foreign-earned income that isn’t remitted to the island. However, there’s a minimum tax of €5,000 a year on remitted income. Cyprus is another Mediterranean island with low corporate tax rates and a non-dom tax regime.
Tax residency can be gained by staying on the island for 183 days a year or 60 days a year without becoming a tax resident of any other country. This short physical presence requirement makes Cyprus a valuable destination for frequent travellers. Greece offers a ‘non-dom’ taxation scheme with more conditions than other programs.
It resembles a lump-sum tax system, like in Switzerland. Non-doms in Greece owe a lump sum of €100,000 on foreign-sourced income each year, plus €20,000 for each adult dependent. Additionally, a qualifying investment of at least €500,000 in the Greek economy is required, unless an investment has already been made via Greece’s golden visa program.
Although the UK is scrapping its non-dom taxation scheme, other countries in Europe continue to offer advantageous non-dom statuses. For current UK non-doms, exploring these options is crucial, and seeking professional advice on the best course of action is recommended.
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