🇬🇧United Kingdom: Tax, Banking and Structures for Private Capital

The United Kingdom remains one of Europe's leading centres for private capital while going through a deep rebuild of personal taxation. On 6 April 2025 the non-dom regime, in place in various forms since 1799, was abolished: domicile left the tax code, the remittance basis closed for new income, a 4-year FIG regime for new residents took its place, and inheritance tax switched from domicile to residence. London kept everything people move here for: banks with centuries of history, English law and courts, schools, and a deep market in prime property.

For a capital owner this sets a new arithmetic. For the first four tax years foreign income and gains are fully exempt — more generous than the old remittance basis, because the money can be brought into the country freely. Worldwide taxation at rates up to 45% follows, and from the eleventh year of residence worldwide inheritance tax at 40% applies to the whole estate. Planning arrival, ownership and departure has become a matter of the calendar: 4 years of relief, 10 years to IHT, 5 years away for a clean exit.

Concept

UK personal taxation is now defined by three dates. The first is the day a person becomes tax resident under the Statutory Residence Test. The second is the end of the fourth year of residence, when eligibility for the FIG regime expires and worldwide income falls under UK rates. The third is the end of the tenth year, when long-term UK resident status extends inheritance tax to worldwide assets, including most trust property.

For those who lived in the UK under the old rules there are transitional tools — the Temporary Repatriation Facility until April 2028 and rebasing of foreign assets; both are covered in the guides to the non-dom reform and the remittance basis after 2025. Every major decision — pre-arrival planning, holding structure, timing of departure — hangs on those three deadlines.

Tax residence: the SRT and split years

Residence is determined by the mechanical Statutory Residence Test (Schedule 45, Finance Act 2013). 183 days or more in a tax year means automatic residence. Fewer than 16 days, for someone resident in any of the three preceding years, or fewer than 46 days for everyone else, means automatic non-residence.

Between those thresholds the sufficient ties test applies: the allowed day count depends on ties — resident family, accessible accommodation, 40+ days of work, more than 90 days spent in the UK in either of the two previous years, and for leavers the country tie. A former resident with three ties becomes resident again at just 46 days; the full mechanics are set out in the article on UK tax residence, with HMRC's RDR3 guidance as the primary source.

The year of arrival usually splits in two: split year treatment divides the tax year into non-resident and resident parts where conditions about starting work, acquiring an only home or the family's move are met. The order matters: a gain realised before the resident part begins stays outside the UK base. That is why disposals of pregnant gains, dividends out of personal companies and a review of fund holdings happen before residence starts — the checklist is in planning before UK residence.

The FIG regime: four years with no tax on foreign income

From 6 April 2025 a new resident who has spent at least 10 consecutive tax years outside UK residence may claim full relief on foreign income and gains for the first four tax years — the foreign income and gains regime, FIG. Funds can be remitted freely: the relief no longer depends on where the money is kept or spent. The price of a claim is the loss of the personal allowance and the CGT annual exempt amount for each claim year, together with a bar on using foreign losses. The claim is made annually through self assessment (form SA109); the official conditions are in HMRC helpsheet HS266.

Anyone outside FIG — a returner after seven years abroad, for example — faces worldwide taxation with credit for foreign tax under treaties. Employees with overseas workdays can use Overseas Workday Relief, now also tied to qualifying new resident status. How worldwide taxation operates after year four is covered in the overview of worldwide income and gains.

Transitional tools: the TRF and rebasing

Former remittance basis users have the Temporary Repatriation Facility: foreign income and gains accumulated before 6 April 2025 can be designated and then brought into the UK freely at a flat rate — 12% in 2025–26 and 2026–27, 15% in 2027–28 (HMRC RDRM73400). The facility closes on 5 April 2028, after which old accumulations remitted to the UK are taxed at normal rates of up to 45%. Certain former non-doms can also rebase foreign assets to their 5 April 2017 value on disposal (HS264). Handling historic mixed funds is covered in the guide to the remittance basis after 2025.

Rates for 2026–27

Outside FIG relief a resident pays on the general scale; as of August 2026 the parameters are as follows.

The direction is consistent: the Autumn Budget 2025 raised taxes precisely on passive income and extended the threshold freeze, so figures deserve a check after every Budget — current rates are published on gov.uk. For fund executives, carried interest moves into the income tax framework from April 2026 — mechanics and effective rates are in a dedicated guide.

Inheritance tax is now residence-based

Domicile has left inheritance tax as well. From 6 April 2025 a long-term UK resident — someone resident for at least 10 of the previous 20 tax years — pays IHT at 40% on worldwide assets (HMRC guidance). The nil-rate band is £325,000, topped up by the £175,000 residence nil-rate band for a main home; transfers to a spouse are exempt. UK situs assets face IHT under any status; what counts as UK situs is explained in the article on the situs of movable assets, and the cross-border comparison sits in the inheritance tax map.

Long-term resident status fades gradually after departure: the tail runs from 3 years (for 10–13 years of residence) up to 10 years (for 20 years), adding a year for each residence year beyond thirteen. For those who held deemed domicile on 30 October 2024, transitional rules cap the tail at 3 years of non-residence — provided they were not UK resident in 2025-26 and do not return to residence. The pre-reform mechanics are in the “Before the reform” section of the 2025 non-dom reform review; dying without a will under English rules is covered in the article on intestacy.

Trusts: the end of excluded property

The classic excluded property trust is finished in its old form. Foreign trust assets are now assessed at the date of the chargeable event: while the settlor is a long-term UK resident they are relevant property, exposed to periodic charges of up to 6% every ten years and to exit charges; once the settlor loses that status a proportionate exit charge arises and the assets move back outside IHT (HMRC IHTM47052).

Foreign property that was excluded property in a settlement immediately before 30 October 2024 keeps transitional protection: on the death of a long-term resident settlor it is disregarded for gift with reservation purposes — but only where it has remained settled property throughout and is, at death, invested outside the UK, held in Authorised Unit Trusts or held as shares in an Open-Ended Investment Company. The protection does nothing against relevant property periodic and exit charges. Trust fundamentals are in the basics guide, the roles of trustee and protector have their own article, and the wider succession logic sits in the succession planning hub.

Business reliefs are tightening too: from 6 April 2026, 100% business property relief and agricultural property relief apply within a combined £2.5 million allowance per person, with 50% relief above it (an effective 20% IHT rate); any unused part of the allowance transfers to a surviving spouse or civil partner, so a couple can shelter up to £5 million; AIM-traded shares get 50% with no threshold; the tax can be paid in interest-free instalments over 10 years (policy paper). For owners of private companies this argues for planning a business exit early. From 6 April 2027 unused pension funds join the taxable estate.

Companies and structures

The default operating vehicle is the private limited company: same-day incorporation, corporation tax at 25% (19% for small profits), predictable company law. Partnerships and professional practices use the LLP — a tax-transparent form with limited liability. Transparency is mandatory in another sense as well: the PSC register is public, and from 18 November 2025 Companies House requires identity verification — new directors and PSCs verify on appointment, existing ones during a 12-month transition (Companies House).

Foreign structures need an inventory once UK residence begins. Companies face the CFC rules of Part 9A TIOPA 2010; individuals face the transfer of assets abroad code and attribution of gains — configurations and defences are in the UK CFC guide and the master guide to CFC rules. Personal holdings of foreign companies and offshore funds carry their own traps: gains on non-reporting funds are taxed as income at up to 45%, with no CGT reliefs.

Hiding assets is hard: HMRC receives CRS and FATCA feeds and matches them systematically — see what HMRC sees; historic mismatches go through a managed disclosure and settlement route, and family offices have their own record-keeping standards. For financial businesses London still offers the full licensing menu: start with the FCA permissions map and regulatory hosting.

Banking

The banking shelf falls into three layers: historic private banks and the London arms of global houses, the premier programmes of the universal banks, and specialists built around one job.

The four houses of the top tier handle multi-million portfolios, trusts and asset-backed lending.

A non-resident can open a UK account, with a dossier: the route is in the non-resident account guide. Banks also re-screen source of funds, sanctions exposure and PEP status continuously — the playbook for a bank account closure is worth knowing in advance. Property purchases run on non-resident mortgages; buying London property itself — with SDLT surcharges for non-residents and companies, and the High Value Council Tax Surcharge announced from April 2028 for residential property in England worth £2m and above (draft annual charges of £2,500, £3,500, £5,000 and £7,500 across four bands; the consultation closed on 14 July 2026 and no legislation has been enacted) — has its own guide.

Immigration routes

There is no investor visa: Tier 1 (Investor) closed to new applicants on 17 February 2022 after reviews of source-of-wealth risk, and no replacement has appeared (Home Office guidance). The remaining routes are built around talent, a founder's own business, or an employer.

Global Talent is an employer-free visa for leaders and promising professionals in science, digital technology and the arts; it needs an endorsement from the field's designated body or a prestigious prize; settlement follows after 3 years where the endorsement came from the Royal Society, British Academy, Royal Academy of Engineering or UKRI, from Arts Council England or Tech Nation under the exceptional talent criteria, or where entry was on a prize listed in Appendix Global Talent: Prestigious Prizes; 5 years applies only to an exceptional promise endorsement from Arts Council England or Tech Nation.

Innovator Founder suits founders: an endorsing body confirms the business is new, innovative, viable and scalable; there is no fixed minimum investment, and ILR is possible after 3 years (gov.uk). Skilled Worker remains the standard employed route: employer sponsorship, a degree-level role and a salary of at least £41,700, or the occupation's going rate if higher (gov.uk).

The path to ILR is being rewritten. The earned settlement consultation (20 November 2025 — 12 February 2026, over 200,000 responses on the Home Office's own count) proposes a 10-year baseline instead of five, with earned reductions — minus 7 years for income of £125,140 over three consecutive years, minus 5 for £50,270, minus a year for C1 English — and extensions for breaches; the proposals include mandatory B2 English, a minimum income and the Life in the UK test (Commons committee report). As of August 2026 final rules have yet to be published; the status and scenarios are tracked in the earned settlement guide.

How the pieces combine

Arrival is planned 6–12 months before residence starts: realising accumulated gains while the tax base is still foreign; auditing offshore funds for reporting status; settling trust and gift decisions before the first resident day — step by step in planning before UK residence. The first four years are used to extract dividends and gains from foreign structures under FIG relief; in parallel, former remittance basis users clear old balances through the TRF at 12% until 5 April 2027, then at 15%.

Exit mirrors entry. Large disposals wait until the fifth full year of non-residence — the temporary non-residence rule pulls gains realised during a short absence into the tax year of return (HS278). Leaving before long-term resident status keeps worldwide assets outside UK IHT immediately; leaving later leaves a 3–10 year tail. The full protocol is in the guide to leaving the UK.

Risks