Other news in brief

On 7 April 2025, the Welsh Government launched a consultation on the potential introduction of an anti-avoidance framework for business rates, alongside a duty for ratepayers to report certain changes of circumstances to billing authorities. These proposals would take effect from 1 April 2026, and the deadline for any comments is 30 June 2025.

Following the introduction of the new Foreign Income and Gains regime on 6 April 2025, HMRC have published a collection of new guidance on 'Globally mobile employees' for employers, which includes guidance on the effect of residence on an employee’s liability to UK income tax, the reformed Overseas Workday Relief, and the operation of PAYE for the new rules in place from 6 April 2025. HMRC have also published guidance on how to send a notification to HMRC on running PAYE on a proportion of globally mobile employee’s income related to their UK duties, which addresses the new s690 Income Tax (Earnings and Pensions) Act 2003 direction process. HMRC have also updated the relevant sections of their manuals with more detailed guidance. This includes adding new pages to the PAYE manual to cover the new globally mobile employee PAYE notification process, adding a new section to the Employment Income manual for Overseas Workday Relief and updating the pages on travelling expenses for non-resident and qualifying new resident employees working in the UK.

Finance Act 2025 introduced, with effect from 6 April 2025, the change from a domicile to a residence-based regime for Inheritance Tax (IHT). Broadly and subject to transitional provisions, individuals who have been UK resident for at least 10 out of the previous 20 tax years will be considered ‘long-term UK resident’. Such individuals will be subject to IHT on their worldwide assets, whilst those who are not ‘long-term UK resident’ will only be subject to IHT on their UK assets. There are specific provisions relating to trusts. On 7 April 2025 HMRC published high level guidance, alongside revisions to the Inheritance Tax Manual including a new section dedicated to long-term UK residence which cover these changes. For further information about these new rules please see our previous Tax Matters Digest article.

Finance Act 2025 (FA 2025) includes legislation abolishing the non-UK domicile ‘remittance basis’ regime and introducing the new Foreign Income and Gains (FIG) regime. From 6 April 2025, UK resident individuals will pay tax on their worldwide income and gains on an arising basis regardless of their domicile, subject to the four-year FIG regime available to individuals within their first four years of UK residence, after a period of at least 10 consecutive years of non-residence. The beneficial tax regime for ‘protected trusts’ introduced in 2017 will no longer be available. These changes are accompanied by transitional rules, including a three-year Temporary Repatriation Facility for those previously taxed on the remittance basis. On 7 April 2025, HMRC published various pieces of guidance on the new rules introduced by FA 2025 in their manuals, including a new Residence and FIG Regime Manual, and updated pages in the Trusts, Settlements and Estates Manual and International Manual. It is anticipated that further HMRC guidance and manual updates reflecting these changes may be published. Please see our Non-Dom Regime Reform page for further information on the new rules.

At Autumn Budget 2024, the Government committed to “launch a consultation in early 2025 to explore the tax treatment of predevelopment costs”. On 11 April 2025, HM Treasury published an update on this, referring to the recent Court of Appeal judgment in Orsted West of Duddon Sands (UK) Ltd v HMRC which we discussed in our last edition. Because the judgment considered “matters with significant readout across to this issue” the publication of the consultation on the tax treatment of predevelopment costs is being postponed and the Government will “determine its next steps in respect to this consultation in due course”. In the meantime, the Government is inviting views from stakeholders on this judgment and its implications.

Yael Selfin, KPMG in the UK’s Chief Economist, provides the latest on the economic outlook for the UK, examining the potential impact of US tariffs and the implications for the public finances.