For april 2025 on the UK non -dom regime will change as following:
What are the current rules for non-dom status?
If you are a non-dom, external and you choose not to pay tax in the UK on your overseas earnings, you must pay:
- £30,000 if you’ve been here for at least seven of the previous nine tax years
- £60,000 for at least 12 of the previous 14 tax years
- In 2017, the non-dom rules were changed to mean you can no longer claim this status if you have been a UK resident for 15 out of the previous 20 years, or if all the following conditions apply:
- you were born in the UK
- your domicile of origin was in the UK
- you were resident in the UK for at least a year since 2017
- However, if you earn less than £2,000 a year from foreign earnings, and you do not bring that money into the UK, you do not have to do anything.
What will be the new rules?
- remove of the preferential tax treatment based on domicile status for all new foreign income and gains (FIG) that arise from 6 April 2025.
- to replace the remittance basis of tax, the government will introduce an internationally competitive residence-based regime, providing 100% relief on FIG for new arrivals to the UK in their first four years of tax residence, provided they have not been UK tax resident in any of the 10 consecutive years prior to their arrival.
- the protection from tax on income and gains arising within settlor-interested trust structures will no longer be available for non-domiciled and deemed domiciled individuals who do not qualify for the 4-year FIG regime.
- A form of Overseas Workday Relief (OWR) will be retained. Officials will engage with stakeholders on the design principles for this tax relief and further details will be confirmed at the Budget.
Italy’s reaction ?
Italy’s government said Wednesday it would double a flat tax on foreign income for high earners newly moved from abroad, from 100,000 euros ($110,000) to 200,000 euros a year.
The original rate, levied for a maximum of 15 years in lieu of other taxes, was introduced in 2017 in a bid to lure wealthy people from overseas, including Italians who had been tax resident elsewhere for many years.
As a result UK non dom’s who want to be taxed favourably have a first altnernative by moving to Italy since they will only pay 200.000 euro of taxes.
What about Malta ?
Malta has the Global Residence Programme to attract more third country national individuals in taking up residence in Malta without taking up employment in Malta, with foreign-source income remitted to Malta by the beneficiary or its dependants being taxed at a flat rate of 15%, subject to a minimum tax of EUR 15,000 per annum.
Beneficiaries should satisfy a number of qualifying criteria in order to be eligible for the beneficial tax treatment. In particular, applicants must hold immovable property in Malta for a purchase price of not less than EUR 275,000 (with lower thresholds applicable in the case of property situated in certain areas in Malta and/or Gozo). Alternatively, individuals may rent property in Malta for an annual rental payment of not less than EUR 9,600 (with lower thresholds applicable in the case of property situated in certain areas in Malta and/or Gozo).
Conclusion
It could be good for people who want to leave the UK for tax reasons to consider Malta as a possible option.
Want to know more, check out our local contacts at unitedtaxnetwork.com
