If you have income, assets, or interests both in the UK and overseas, understanding your residence and domicile status is vital to managing your tax liabilities properly. With rule changes now in effect, and more under consultation, it’s more important than ever to keep your position under review.
At Dunkley’s, we work closely with clients across Bristol and beyond who have international ties, helping them navigate the UK’s increasingly complex cross-border tax environment.
What’s changed in 2025?
As part of the Spring Finance Bill 2025, the government has confirmed a reform of non-dom tax status, replacing the previous remittance basis with a simpler residence-based system. From April 2026, new arrivals to the UK may qualify for a four-year tax exemption on foreign income and gains, regardless of domicile.
But that’s next year. For 2025/26, existing domicile and remittance basis rules still apply, and so do the many traps and planning opportunities they present.
Key Terms: Residence and Domicile
- Tax residence is determined by the Statutory Residence Test (SRT). It considers your time spent in the UK, where you work, where you live, and your ties to the country.
- Domicile is your long-term home or origin. You can be resident in the UK but domiciled elsewhere, or vice versa.
Your combination of residence and domicile affects:
- Income tax
- Capital gains tax
- Inheritance tax
Getting it wrong could mean paying tax in two countries – or missing legitimate reliefs.
What is Double Tax Relief?
The UK has double taxation agreements (DTAs) with more than 130 countries. These agreements set out which country has taxing rights and how you can claim relief. For example:
- If you’re UK-resident and pay tax on foreign income abroad, you may offset that against your UK tax bill.
- If you’re non-resident but receive UK-source income, a treaty might reduce the UK withholding tax rate.
We help you assess your eligibility and guide you through the claim process, which can be complex, particularly for investment income, property, pensions, and business profits.
Why Advice Matters More in 2025
HMRC is paying closer attention to:
- Individuals switching tax residence partway through the year
- Domicile claims for inheritance tax (especially for long-term UK residents)
- People with overseas assets or trusts
As rules continue to shift, so does HMRC’s compliance approach. Voluntary disclosures, accurate records, and early planning are key.
What Dunkley’s Can Help With
- Reviewing your residence and domicile status
- Structuring your affairs to avoid double taxation
- Claiming relief under the right DTA
- Handling foreign income on UK tax returns
- Navigating inheritance tax for non-doms and long-term UK residents
Get in touch with Dunkley’s today for tailored tax advice in Bristol. Call 01454 619900 or email advice@dunkleys.accountants to speak with one of our experts about your international tax position.