The End of the UK Non-Dom Regime
For years, the UK’s non-dom regime allowed residents who were not domiciled in the UK to pay tax only on their UK income and gains, while foreign income and gains (FIG) were taxed only if remitted to the UK. This offered significant tax benefits for wealthy individuals with international financial interests.
In March 2024, Chancellor Jeremy Hunt announced the end of the non-dom regime, which will take effect on April 6, 2025. Under the new rules, individuals who have not been UK tax residents for the previous ten years will benefit from a four-year period during which they won’t be taxed on their foreign income and gains—even if these are brought into the UK. After this period, they will be taxed on their worldwide income and gains.
Additionally, inheritance tax (IHT) rules are set to change, moving from a domicile-based system to a residence-based one. This could result in UK taxation of global assets after ten years of UK residency.
Why Luxembourg?
Luxembourg has quickly become a strategic destination for British high-net-worth individuals (HNWIs) seeking to restructure their wealth management outside the UK. The country offers several key advantages:
Favorable Tax Environment
Luxembourg offers a well-established legal and tax framework that supports holding companies, family offices, and private wealth structures.
Advanced Financial Services
Home to many leading international banks and asset managers, Luxembourg provides discreet, personalized, and professional financial services tailored to entrepreneurs and investors.
Political and Economic Stability
Luxembourg’s stable government, robust regulatory environment, and AAA credit rating make it a secure place to manage and protect wealth.
Central European Location
Positioned at the heart of the European Union, Luxembourg is ideal for entrepreneurs who wish to expand their business and investment footprint across the continent.
Damalion’s Support for British Entrepreneurs and Families
Damalion offers tailored support to British clients navigating this evolving financial landscape. Whether you are looking to diversify assets, open a Luxembourg bank account, or relocate to Luxembourg, we provide expert guidance and hands-on assistance.
Our services include:
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Introductions to top-tier Luxembourg private banks
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Structuring of holding companies and investment vehicles
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Regulatory and tax compliance support
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Full relocation assistance, including residence permits, housing, and local setup for families
Our multidisciplinary approach ensures a smooth transition and long-term success for British entrepreneurs adapting to post non-dom planning. Leanr more about our relocation services in Luxembourg.
This communication is for informative purpose only. All services are rendered by vetted and accredited professionals. Clients must contact their regular lawyers to know more about opening foreign bank accounts and the applicable regulations in their latest current tax residence. Damalion focused on advising families for wealth preservation by identifying opportunities and challenges. Please contact your Damalion expert now
Glossary of Terms– Non-Domiciled (Non-Dom) Status: A UK tax classification that allowed foreign income to be tax-free if not remitted to the UK.
– Foreign Income and Gains (FIG): Income or capital gains earned outside of the UK.
– Inheritance Tax (IHT): A tax on a deceased person’s estate, which may include non-UK assets under new rules.
– High-Net-Worth Individuals (HNWIs): Individuals with significant wealth, typically with investable assets over £1 million.
– Holding Company: A company created to own shares in other companies and manage investments.
– Investment Vehicle: A legal structure used to hold and manage investments.
– Regulatory Compliance: The process of adhering to laws and regulations in relevant jurisdictions.
– Jurisdiction: A defined legal territory such as the UK or Luxembourg where specific laws apply.
