If you’re contemplating a move from your home in Hong Kong to the UK, either for business opportunities or personal reasons, it’s really important that you prepare for a far more complex tax landscape than the one you’re used to.
The UK’s tax system can be particularly intricate for business owners and high-net-worth individuals, especially with the recent overhaul of the non-domicile (non-dom) regime announced in the Spring Budget 2024.
Understanding these changes and planning accordingly is going to be crucial to making your transition as smooth and efficient as possible.
Taxes you’ll need to pay in the UK
Historically, non-doms could opt to pay tax on a remittance basis – meaning they were only taxed on their UK income and any foreign income they brought into the country.
However, the recent Spring Budget (a key economic announcement made by the Government) has introduced sweeping reforms that necessitate a deeper understanding and strategic planning.
In 2025, the non-dom regime is being transformed.
The remittance basis charge, which non-doms could previously pay to avoid tax on unremitted foreign income, has been abolished.
This change means that if you’re a non-dom, you will now be subject to UK tax on your worldwide income and gains, with fewer options to limit this liability through the remittance basis.
For Income Tax, your liabilities are based on how much you earn from employment.
The basic rate of Income Tax is 20 per cent for earnings between £12,571 and £50,270.
The higher rate of 40 per cent applies to incomes from £50,271 to £150,000, and the additional rate of 45 per cent applies if your income is above £150,000.
In addition to Income Tax, Capital Gains Tax (CGT) is another critical consideration.
CGT applies to the profit you make when you sell or dispose of an asset that has increased in value.
For the tax year 2025-2026, the rates for CGT are 10 per cent for basic rate taxpayers and 20 per cent for higher and additional rate taxpayers, with higher rates of 18 per cent and 24 per cent respectively for gains made on residential property.
Strategic tax planning can offer opportunities to mitigate CGT, such as using tax-free allowances, timing disposals to coincide with years of lower income, or investing in assets that qualify for reliefs like Business Asset Disposal Relief.
Now that the non-dom regime is changing, full reporting of worldwide income will be required. As a non-dom, you’ll need to disclose all global income and gains on your UK tax returns, regardless of whether you remit this income to the UK.
Despite the tightening of rules, the UK Government has introduced a transitional period for new non-dom residents.
For the first four years of residency, you can benefit from a grace period during which you are not required to pay tax on your worldwide income, provided this income is not remitted to the UK.
So, if you were planning to just remain in the UK for a short period of time, it may be worth leaving before the four-year period is over.
When to seek advice from a tax specialist
Navigating the UK’s tax regime can be daunting, and the stakes are high for individuals with considerable global income or businesses that have an international reach.
Engaging a tax specialist can provide you with tailored advice that considers your specific circumstances, helping you to comply with UK tax laws while optimising your tax position.
We strongly recommend discussing your situation with the SMCO team.
Our expertise in Hong Kong and UK tax law allows us to offer strategic guidance that aligns with your personal and business goals, ensuring your move to the UK is as beneficial and seamless as possible.
Please get in touch for more information, or for tailored tax advice.
