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      Abolishment of the UK Non-Dom Regime

      UK resident non-domiciled (UKRND) individuals are a very important part of the client base of many Swiss banks. These are usually high (or even ultra-high) net worth individuals. For years, rules have allowed these individuals to elect not to pay UK tax on their overseas income and gains for up to 15 years (as long as the overseas income and gains were not remitted to the UK), and to significantly reduce their UK inheritance tax exposure. The UK Non-Dom Regime was abolished as of 6 April 2025 and was replaced with a “simpler and fairer” regime.

      Chris Goddard
      Chris Goddard

      Director, Financial Services Tax

      KPMG Switzerland

      The new regime

      Under the new rules, individuals becoming UK tax resident from 6 April 2025 – having been non-resident in the UK for at least the previous ten consecutive years – will benefit from an exemption from UK tax on foreign income and gains during their first four years of UK residence. Unlike the former remittance basis, these amounts may be freely brought into the UK without triggering a tax charge.

      Following the four-year period, such individuals will be subject to UK taxation on their worldwide income and gains in line with the standard UK resident regime. A complex set of transitional provisions applies to individuals who were UK resident but non-domiciled as at 6 April 2025.

      Learn more here

      What should Swiss banks be doing now?

      • Communication with clients

        Swiss banks should be proactively reaching out to all their existing UKRND clients to understand how they plan to react to the change in the UK tax regime. 

      • Cross-border relocations

        Some existing UKRNDs are likely to leave the UK in response to this announcement. By staying close to their clients, Swiss banks will be able to support such clients as they relocate and reorganize their financial affairs. Some UKRNDs may even consider relocating to Switzerland.

      • Wealth management opportunities

        The change in tax regime may encourage some individuals (both existing UKRNDs as well as prospective new residents) to restructure wealth (e.g. using trusts), for which it will be expected that their Swiss bank is knowledgeable on the options available.

      • Account segregation service offering

        This is no longer necessary for new UK residents since 6 April 2025, and Swiss banks will need to ensure their service offering for such clients is adapted accordingly. However, existing UKRNDs may still need to maintain their existing account segregation for historic income and gains. This has the potential to cause confusion for Swiss banks on when account segregation is essential, and when not.

      • Investing into UK situs assets

        Swiss banks typically used to avoid investing into any UK situs assets for UKRND clients, often relying on flags provided by data service providers (e.g. SIX) to block such securities. Since 6 April 2025, this is only necessary for the first 4 years of UK tax residence, after which there is no longer any need to avoid such assets. Swiss banks need to determine what policy they wish to apply here and how this will be implemented operationally (e.g. continue to block UK situs securities for such clients indefinitely or open up this investment market after 4 years).  

      • Revision of existing UKRND policies / guidance / forms

        Swiss banks that have an existing UKRND policy or internal guidance document need to consider making revisions to the documents to reflect the new regime. This applies equally to any UKRND specific forms that Swiss banks use (e.g. UKRND self-declaration forms, or UKRND client instruction forms).

      • Training

        In order to seize the full potential of the change in regime, it is essential that key personnel within the Swiss bank, in particular (1) relationship managers covering the UK market, as well as (2) relevant middle- / back-office personnel (tax, legal, compliance), are properly trained on the new tax regime. 

      • Interaction with the US Qualified Intermediary (QI) regime

        Previously, UKRNDs claiming the remittance basis of taxation were not eligible to benefit from reduced US withholding tax rates under the UK-US double tax treaty. However, from 6 April 2025 this may be possible, providing Swiss banks that are QIs collect new documentation from their FIG clients to enable treaty relief on US source income.

      Navigate the UK Non-Dom Regime with confidence

      With the new framework now in effect, Swiss banks must ensure their policies and operating models are fully aligned with the current rules. Inaction is no longer an option.

      KPMG can support you in reviewing, refining, and implementing a compliant policy that addresses regulatory expectations and operational realities.

      Reach out to our specialists for advice

      Meet our expert

      Chris Goddard
      Chris Goddard

      Director, Financial Services Tax

      KPMG Switzerland

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