The abolition of the UK's non-dom regime is the most significant structural change to the UK's tax environment for internationally mobile wealth in a generation. From 6 April 2025, all UK residents pay tax on worldwide income and gains as they arise, regardless of domicile. The individuals who had anchored their lives in London while managing international assets have been reclassified from a class of specially treated residents into standard UK taxpayers — and a significant number concluded this was the moment to stop living in the UK entirely.
2025 Date non-dom regime was abolished
What actually changed on 6 April 2025
The UK's non-dom regime had operated since the 19th century. Individuals whose permanent home — their domicile — was legally considered to be outside the UK could elect to be taxed only on UK-source income, and on foreign income only if it was remitted to the UK. For the internationally wealthy, this was the structural mechanism that made London viable as a base: you could live there, attend the schools, use the infrastructure, participate in the social and business fabric, while keeping offshore income outside the scope of UK taxation.
The Finance Act 2025, which received Royal Assent on 20 March 2025, abolished this framework entirely. From 6 April 2025, UK residency means worldwide taxation. A four-year Foreign Income and Gains relief is available for new arrivals who have not been UK-resident for the previous ten consecutive years — but this is a transitional arrangement for new arrivals, not a substitute for what existed before.
The parallel inheritance tax reform is equally significant. UK IHT has moved from a domicile-based system to a residence-based one. Non-UK assets are now within the scope of UK IHT once an individual has been UK-resident for ten of the previous twenty years. For long-standing UK-resident non-doms, this creates a material estate planning exposure that did not previously exist.
The arithmetic that drove the decision: A former non-dom with £10m in foreign income — dividends, capital gains, rental income from overseas property — previously paid no UK tax on that income under the remittance basis. From April 2025, that same income is subject to UK income tax and CGT at rates up to 45% and 24% respectively. The financial case for remaining UK-resident collapsed overnight for a specific, highly mobile subset of the population.
The six destinations receiving the most departing UK wealth
United Arab Emirates
Zero personal income tax · Zero capital gains tax · Zero inheritance tax
The UAE absorbed the largest share of departing UK non-doms and consistently ranks as the world's top destination for HNWI migration by net inflow. The combination of zero personal income tax, zero capital gains tax, and zero inheritance tax on worldwide assets represents the most favourable tax environment available to the internationally mobile wealthy in a major global city. Dubai's infrastructure, connectivity, English-language environment, and quality of international schools make it operationally viable rather than merely tax-efficient.
The Golden Visa programme — a ten-year renewable residency available through property investment from AED 2 million (approximately £440,000) or other qualifying routes — provides long-term certainty that temporary visa arrangements do not. Henley & Partners projected a net inflow of 9,800 millionaires into the UAE in 2025. The DIFC and Abu Dhabi Global Market provide financial regulatory frameworks familiar to London-trained professionals.
The honest limitation: The UAE is not a permanent cultural home for most who choose it. Summer temperatures exceed 45°C. The social infrastructure of a city that has existed for fifty years cannot replicate what London, Milan, or Lisbon offer in terms of cultural depth. Most who relocate to Dubai treat it as a defined chapter — wealth accumulation, school years for children — rather than a permanent settlement.
Italy
€300,000 flat annual tax on all foreign income · 15 year duration · Family extension at €50,000 per member
Italy's flat tax regime for new residents — formally Article 24-bis of the TUIR — replaced a complex progressive system with a single annual lump sum on all foreign-source income. New entrants from 1 January 2026 pay €300,000 per year (increased from €200,000 under the 2026 Budget Law), plus €50,000 per qualifying family member. The regime runs for fifteen consecutive years and is grandfathered — those who entered before the increase continue on their original terms.
For a former UK non-dom with £5m or more in foreign annual income, the mathematics are compelling. The tax on that income in the UK would be £2.25m or more at 45%. Italy's flat tax costs €300,000 — approximately £255,000 at current rates. The saving exceeds £2m per year. Italian-source income remains subject to ordinary Italian tax; the flat tax covers foreign income only.
What made Italy specifically attractive to the UK non-dom community post-2025 is the timing. The UK abolition created a one-time window to exit before the full UK tax charge crystallised, and Italy's pre-established regime was ready to receive them. Serial entrepreneur Ann Kaplan Mulholland, who spoke publicly about her departure from the UK, cited Italy as her destination precisely for this combination of financial structure and lifestyle.
The honest consideration: The regime costs more than it did. At €300,000, it is only economically rational for individuals with foreign income substantially above that threshold — as a rule of thumb, the regime makes sense at foreign income of approximately €1.5m or more annually. For those below this, other options may offer better value.
Switzerland
Expenditure-based lump sum taxation · Cantonal variation · No capital gains tax on private assets
Switzerland's lump-sum tax regime (Pauschalbesteuerung) taxes qualifying foreign residents on their Swiss living expenditure rather than income. The minimum taxable base is CHF 400,000 in most cantons, though the effective tax varies significantly by canton — Geneva and Zurich apply higher rates than Valais or Zug. There is no capital gains tax on private assets in Switzerland, which is particularly relevant for founders and investors with equity positions.
Switzerland attracts a different profile of non-dom relocatee than Dubai or Italy: those prioritising political and financial stability, discretion, proximity to European financial markets, and quality of life in a neutral jurisdiction. Geneva and Zurich maintain world-class private banking infrastructure, international schools, and professional service ecosystems built over centuries rather than decades.
The honest consideration: Switzerland is expensive — Mercer ranks Zurich and Geneva among the world's most expensive cities for expatriates. The lump-sum regime requires genuine residency and substantial expenditure in Switzerland; it is not available as a nominal arrangement. The minimum cantonal requirements have increased in recent years as Swiss authorities have tightened administration of the regime.
Portugal
IFICI (NHR 2.0): 20% flat tax on qualifying Portuguese income · Foreign income exempt · 10 year duration · Eligibility now restricted to qualifying professionals
Portugal's non-habitual resident regime — which attracted tens of thousands of HNWI relocatees between 2009 and 2024 — was replaced by the IFICI (Tax Incentive for Scientific Research and Innovation) from January 2025. The original NHR closed to new applications in March 2025. IFICI is more restrictive: it targets highly qualified professionals in specific sectors (technology, science, healthcare, innovation, higher education) rather than the broad wealth and passive income category the original NHR covered.
For those who qualify — technology executives, medical specialists, researchers, startup founders working in qualifying sectors — IFICI offers a 20% flat tax rate on Portuguese-source income and exemption on most foreign-source income for ten years. Portugal's appeal as a country — climate, food, safety, English-language accessibility, quality of life — remains unchanged. The tax regime is narrower than it was.
The critical shift: Portugal no longer offers a broadly accessible preferential tax regime for retirees, passive investors, or the generalist wealthy. The IFICI is specifically targeted. Former UK non-doms with passive income portfolios — the category that most relied on the original NHR — cannot access IFICI. For this group, Portugal remains an attractive country but no longer a tax-efficient one in the way it was before 2025.
Singapore
No capital gains tax · Progressive income tax up to 24% · Territorial taxation · Global Investor Programme
Singapore taxes income derived in Singapore at progressive rates up to 24%, but does not tax capital gains, foreign-sourced income (with some exceptions for funds and businesses), or offshore income not remitted to Singapore. For the right profile — founder with equity upside outside Singapore, investor with primarily non-Singapore income — this represents genuine tax efficiency alongside world-class infrastructure and political stability.
Singapore's Global Investor Programme provides permanent residency through qualifying investment — typically SGD 2.5m (approximately £1.5m) in approved channels. The island's legal system, financial regulation, and professional service infrastructure are at the highest global standard. For business-active HNWIs with Asia-Pacific interests or international investment portfolios, Singapore is operationally superior to most alternatives.
The honest consideration: Singapore is significantly more expensive than Dubai — cost of living is approximately 35-44% higher across comparable categories. Housing is expensive and geographically constrained. The cultural environment is structured and rule-governed in ways that some find restrictive. Singapore works exceptionally well as a long-term base; it works less well as a transient tax haven.
The comparison that most people need
| Destination | Tax on £5m foreign income | Capital gains | IHT on foreign assets | Best suited to |
|---|---|---|---|---|
| UAE | £0 | None | None | Tax maximisation, family flexibility, Asia/Africa business base |
| Italy | ~£255,000 flat | None on foreign assets under flat tax | Exempt on foreign assets under flat tax | High foreign income, lifestyle priority, European base |
| Switzerland | Lump sum, canton-dependent (CHF 400k+ base) | None on private assets | Cantonal variation | Financial stability, discretion, equity positions |
| Portugal (IFICI) | Exempt (qualifying sectors only) | Exempt (foreign source) | Standard Portuguese rates | Qualifying professionals in tech/science/healthcare |
| Singapore | Exempt if foreign-sourced | None | None | Asia-Pacific business base, equity-rich founders |
| UK (post-2025) | Up to £2.25m+ at 45% | Up to 24% | 40% on worldwide assets after 10 years' residence | Those for whom lifestyle and access outweigh tax cost |
What the data actually shows about destination choices
The headline narrative — everyone is going to Dubai — is an oversimplification. Dubai received the largest volume of departures because it offers the cleanest tax position, the easiest residency route, and the most developed infrastructure for mobile wealth. It is the default choice for those whose primary driver is tax efficiency and who have flexibility on lifestyle.
Italy received a disproportionate share of the cultural and lifestyle-driven departures — former non-doms for whom London's cultural, social, and physical environment was part of the attraction, and who sought an equivalent in Europe. The flat tax regime provided the fiscal mechanism; the quality of life in Milan, Rome, Florence, and the Italian countryside provided the pull.
Switzerland, Singapore, and to a lesser extent Monaco received the more business-constrained departures — those whose professional infrastructure, client relationships, or business operations placed specific geographic requirements on their residency choice.
Planning an international relocation?
Currency transfers, international health insurance, and property search — the practical infrastructure of a major international move requires coordination across multiple services. We have mapped the best options across each category.
Relocation IntelligenceFrequently asked questions
Can I still access the UK's non-dom regime if I move back to the UK after living abroad?
The old non-dom regime is abolished and cannot be accessed by new arrivals. New UK arrivals who have not been UK-resident for the previous ten consecutive years can access the four-year Foreign Income and Gains relief, which provides exemption from UK tax on foreign income and gains for the first four years of UK residence. This is more limited than the former non-dom regime, which could last up to fifteen years.
Does Italy's flat tax cover UK-source income?
No. Italy's flat tax regime covers foreign-source income only — income arising outside Italy. Italian-source income remains subject to ordinary Italian progressive income tax. UK-source income (rental from UK property, UK dividends, UK capital gains) would still potentially be subject to both Italian ordinary tax and UK tax, subject to the Italy-UK double tax treaty. Specific tax advice is essential before relying on this distinction.
Is Portugal's NHR still available for people who applied before the deadline?
Those who validly obtained NHR status before the transitional deadline retain their status until the end of their ten-year period. No new NHR applications are possible — the programme closed in March 2025. The replacement regime, IFICI, has different eligibility criteria and is not accessible to passive income holders or general retirees in the way the original NHR was.
What are the practical steps when relocating for tax purposes?
Establishing genuine non-UK tax residency requires more than purchasing a property abroad. You need to meet the UK Statutory Residence Test conditions for non-residence — broadly, spending fewer than 16 days in the UK in the tax year (for those who have previously been UK-resident for fifteen or more of the previous twenty years), or meeting other conditions depending on your specific history. The rules are complex. Qualified UK tax advisers and international tax specialists in the destination country should be engaged before and during the transition.
This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax rules are complex, change frequently, and depend on individual circumstances. Always seek advice from qualified tax advisers in both your home country and destination country before making relocation decisions. Data on millionaire migration is sourced from Henley & Partners projections and should be treated as estimates rather than official statistics.