From UK to Cyprus (2026): Life After the April 2025 Non-Dom Abolition — The Complete FIG-Refugee Playbook

On 6 April 2025 the United Kingdom abolished the remittance basis of taxation and the concept of domicile for tax purposes. For roughly 200 years the UK had taxed resident non-domiciled individuals on a basis that in the modern era produced one of the most attractive regimes in the G7. That regime is now gone. The replacements — a 4-year Foreign Income and Gains regime and a Temporary Repatriation Facility — are narrower, shorter and available to far fewer people than the old system. For a large cohort of former non-doms, the answer is to leave the UK and land in a residence-based low-tax jurisdiction before the new inheritance-tax tail bites. Cyprus is the most common destination in that cohort. This guide sets out, in plain English, what ended, what replaced it, and how a UK leaver structures a Cyprus landing in 2026.

What ended on 6 April 2025

Two things ended at once. The remittance basis, under which a resident non-dom paid UK tax on foreign income and gains only to the extent they were brought to the UK, is repealed for 2025/26 and later years. Deemed domicile for tax — the rule that made you UK-domiciled after 15 out of 20 years of residence — is also gone. From 6 April 2025 residence, not domicile, is the single anchor for income tax, capital gains tax and (with a transition) inheritance tax.

For someone who had been claiming the remittance basis in April 2024 and who does nothing, the default from 2025/26 onwards is UK tax on worldwide income and gains at the standard rates — 45% on non-savings non-dividend income above £125,140, 39.35% on dividends in the additional rate band, 24% on most capital gains. The Temporary Repatriation Facility is a one-off exit ramp for legacy pre-April-2025 funds, not a substitute for the old regime.

The 4-year FIG regime: who actually qualifies

The Foreign Income and Gains regime is open only to individuals who become UK tax-resident in 2025/26 or later after at least ten consecutive tax years of non-UK residence. For those who qualify, foreign income and gains arising in the first four UK tax years of residence can be claimed as exempt from UK tax, whether or not the funds are brought to the UK. The relief is claimed year-by-year on the self-assessment return, and the claim must be made by 31 January of the second tax year after the year to which it relates.

The number of existing UK-resident non-doms who qualify is small. If you have been UK-resident for the last five or ten years, you do not meet the ten-year non-residence gateway. You cannot use the FIG regime. You can leave, spend at least ten tax years outside the UK, and then return — but that is a very different commitment than continuing the remittance basis. For most long-standing non-doms, the FIG regime is academic.

Temporary Repatriation Facility: 12%, 12%, 15%

The Temporary Repatriation Facility is the legacy clean-up. A former remittance-basis user can designate specified amounts of pre-6-April-2025 foreign income and gains, pay the TRF charge, and then bring the designated funds into the UK at any later date without any further UK income tax or capital gains tax on the remittance. The rates are:

The facility is generous relative to marginal rates but has a hard deadline. After 5 April 2028 the window closes and legacy pre-2025 foreign income and gains sit in their pre-reform status — taxable on remittance at marginal rates, which now go to 45% / 39.35% / 24%. For anyone with material offshore funds who plans to use them in the UK, 12% is almost always the right answer; for anyone leaving the UK, the TRF still has value where any UK use of those funds is possible within a treaty-credit horizon. Model it before deciding not to claim.

The new residence-based IHT: 10-of-20 and the tail

Inheritance tax has also moved from a domicile basis to a residence basis. From 6 April 2025 an individual is a "long-term resident" once they have been UK tax-resident for at least ten of the previous twenty tax years. A long-term resident is within the scope of UK IHT on worldwide assets (40% above the nil-rate band).

Once long-term resident, leaving the UK does not terminate IHT exposure immediately. A tail of 3 to 10 tax years applies. The tail is calibrated by how long the individual had been UK resident on departure:

A separate reset rule applies: after ten consecutive tax years of non-UK residence, the long-term-resident status is cleared and the clock restarts. For a UK-born lifelong resident with significant offshore assets, the IHT reform is the largest single driver of relocation decisions in 2026 — leaving at year 12 (to get a 3-year tail) is a materially different exposure from leaving at year 20.

BADR to 18% from April 2026 and CGT at 24%

The Autumn 2024 Budget raised the main CGT rates for disposals on or after 30 October 2024: the lower rate from 10% to 18%, the higher rate from 20% to 24%. Residential property rates were already at those levels and continue there. The combined effect is that non-BADR disposals now carry a 24% top rate for a higher-rate or additional-rate taxpayer.

Business Asset Disposal Relief, which gives a lower rate on up to £1 million of lifetime qualifying gains, was 10% historically. It rose to 14% on 6 April 2025 and rises again to 18% on 6 April 2026. The lifetime cap remains at £1 million. A founder selling a qualifying trading company pre-April 2026 pays 14%; the same sale on 7 April 2026 pays 18%. That is a £40,000 timing difference on a £1 million gain, enough to drive Q1 2026 completion decisions and, in the context of a Cyprus move, enough to change the order of operations.

The Statutory Residence Test: leaving cleanly

The Statutory Residence Test decides UK residence each tax year on the basis of days and ties. For leavers there are three layers to consider. The Automatic Overseas Tests, if met, override everything else: fewer than 16 UK days in the tax year having been UK resident in any of the prior three years; fewer than 46 UK days having been non-resident for the prior three years; or the full-time work abroad test — average 35+ hours per week in Cyprus, fewer than 31 UK working days, fewer than 91 UK days in total.

If no Automatic Overseas Test applies, the Automatic UK Tests kick in (183+ UK days, UK home with no overseas home, UK full-time work). Failing those, the Sufficient Ties Test looks at family, accommodation, work, 90-day and country ties against UK days — the more ties, the fewer days allowed.

Split-year treatment allows the year of departure to be split. Case 1 (starting full-time work overseas) is the cleanest route for a founder moving a working business to Cyprus. Case 3 (ceasing to have a UK home) suits anyone selling up. Getting a split-year case right is worth real money: it avoids a full tax year of UK worldwide taxation on pre-departure income.

The 5-year temporary non-residence trap

Even after leaving the UK cleanly, the UK retains a taxing right over certain pre-departure assets if you come back within five years. The temporary non-residence rules re-tax certain gains and dividend-style receipts if the period of non-residence is less than five full years and you had been UK resident in four of the prior seven years.

For a Cyprus leaver who sells a UK company within four years of leaving and then moves back to the UK, the gain becomes chargeable in the year of return at then-prevailing CGT rates. This is the rule that most often sinks an aggressive "leave-for-18-months-and-sell" plan. Five full years of non-residence is the minimum commitment for a clean UK severance on a crystallising gain.

Landing in Cyprus: 60-day rule and non-dom

The Cyprus side is comparatively straightforward. Cyprus tax residence is established under either the 183-day rule or the 60-day rule. The 60-day rule is the one UK leavers typically use: 60 days in Cyprus, no 183 days in any other country, tax-resident nowhere else, a permanent Cyprus home (rented or owned), and some form of Cyprus business connection (directorship, employment or self-employment). See our 60-day rule guide.

A UK national moving to Cyprus is, by default, a Cyprus non-dom: domicile of origin is outside Cyprus, and no acquired Cyprus domicile. The non-dom regime exempts worldwide dividend, interest and — in most cases — rental income from the Special Defence Contribution. The standard exemption window is 17 tax years. Under the reform effective from 1 January 2026 the regime was extended to 22 years, with an optional paid extension to 27. See the non-dom guide.

Cyprus does levy personal income tax on employment and business income up to 35% on the top band, but dividends paid by a Cyprus or foreign company to a non-dom individual are not subject to income tax (they are not in the tax base) and not subject to SDC (because of non-dom status). Corporate tax rose to 15% on 1 January 2026, up from 12.5%.

The UK–Cyprus treaty

The 2018 UK–Cyprus Double Taxation Convention was signed on 22 March 2018 and entered into force on 18 July 2018, replacing the older 1974 treaty. Key features for a relocating individual:

• Dividends: 0% source-state withholding in most cases; 15% where the payer is a tax-exempt property investment vehicle.
• Interest: 0% source withholding.
• Royalties: 0% source withholding.
• Capital gains on shares: taxed only in the state of residence of the seller, with a real-estate-rich-company exception.
• Pensions: non-government pensions taxable only in the country of residence; government-service pensions historically taxed in the UK, with a one-off transitional election window that closed on 31 December 2024.
• Dual-resident tie-breaker: permanent home → centre of vital interests → habitual abode → nationality → mutual agreement.

FIG-refugees: the client we see most

"FIG-refugee" is the informal term for a former UK-resident non-dom who does not qualify for the new FIG regime, whose remittance-basis world has ended, and who is actively exiting the UK. The typical profile we meet in 2026:

• Aged 35 – 65, UK-resident 8 – 20 years, originally from outside the UK.
• Foreign-source dividend, interest and rental income in the low six to low seven figures annually.
• Legacy offshore trust or personal investment company.
• A UK home they want to keep as an investment, and a UK or EU working life they are willing to reshape.

For this profile Cyprus beats Portugal and Italy on net numbers after the Portuguese NHR closed to new applicants at the end of 2023 and the Italian lump-sum regime doubled to €200,000/year for new applicants from August 2024. Cyprus is more favourable for interest and dividend income, keeps capital gains on shares outside the tax net, and the 60-day rule uniquely allows UK leavers to keep real mobility.

A 12-month execution timeline

Mistakes that turn a £ million into a £2 million bill

1. Thinking non-dom just rebranded. It did not. If you are already a multi-year UK resident non-dom, the FIG regime does not help you. Model 2025/26 on default worldwide taxation.
2. Missing the BADR rate step. A founder completing a £1 million sale on 7 April 2026 pays £40,000 more than one who completes on 5 April 2026.
3. Forgetting the IHT tail. Moving does not clear IHT instantly. A 20-year UK resident leaving in 2026 still has a 10-year IHT tail on worldwide assets.
4. Breaking the 5-year temporary non-residence rule. Selling the UK company in year 2 and going home in year 4 means the gain re-crystallises in the UK.
5. Skipping the TRF. The window closes 5 April 2028 for the 15% band. Legacy pre-2025 balances sitting offshore forever lose value if you ever need them in the UK.
6. Leaving a UK home available. Under the SRT, an available UK home is an accommodation tie; combined with other ties, it can re-establish UK residence in a later year.
7. Running the Cyprus company from London. Cyprus corporate residence depends on effective management. Board meetings in London make the Cyprus company UK-resident, which destroys the 15% rate.