UK to abolish non-dom tax regime – What does this mean for Cyprus?

The UK will abolish the nom-dom tax regime from April 2025 and introduce a new “residence-based scheme with internationally competitive arrangements for people coming to the UK on a temporary basis”, the country’s Chancellor of the Exchequer, Rachel Reeves, announced while presenting the UK’s budget for 2025.

"We will abolish the non-dom tax regime and remove the outdated concept of domicile from the tax system from April 2025,” she said. “We will introduce a new, residence based scheme with internationally competitive arrangements for those coming to the UK on a temporary basis while closing the loopholes in the scheme designed by the party opposite.”

Local experts previously told InBusinessNews that if the UK’s special tax regime for non-doms is abolished, these individuals will be on the search for new destinations with their own special tax regimes. And Cyprus could be the ideal candidate.

Costas A. Markides, Board Member, International Tax and Corporate Services, at KPMG Cyprus, explained:

“If they abolish it, Cyprus may benefit and we should highlight our own incentives. This may be an opportunity for Cyprus in terms of attracting a group of investors that wishes to leave London.”

To approach them successfully, he added, “we must showcase the Cyprus Non-Dom Regime that we have in place”.

Non-domiciled residents are individuals who live in the UK (have their residence in the UK), but claim tax on their permanent place of residence abroad. Simply put, these individuals do not have to pay UK tax rates on their foreign income.

The Labour Party had pledged to replace the current non-dom tax regime and introduce a shorter-term scheme for temporary visitors to the UK.

Also read: Could Cyprus benefit if the UK abolishes its non-doms tax regime?