Updated
GL-N-04
Glossary · Taxes and residency
Non-dom - Non-domiciled resident
A resident of a country whose domicile is in another country. In such regimes (for example, in the UK) foreign income is taxed on preferential terms or not taxed until brought into the country. A tool of lawful optimization.
01 / In 30 seconds
The short answer
- What it is
- A resident of a country whose domicile is in another country — with a preferential regime for foreign income
- How it works
- Foreign income is not taxed until it is brought into the country (remittance)
- Where it applies
- Regimes such as the British non-dom and equivalents in other countries
- Is it legal
- Yes: it is an official regime, not a scheme
- Can you prepare
- Yes: plan your residence, domicile and income flows
02 / In plain words
What Non-dom means
A non-dom (non-domiciled resident) is a person who lives in a country as a tax resident, but whose domicile (permanent home for life) is in another country. In a number of states a preferential tax regime applies to such people: foreign income is taxed lightly or not at all until it is brought into the country of residence.
The classic example is the British non-dom regime: the resident pays tax on local income, while foreign income is taxed only when it is brought into the country (the remittance basis). Similar regimes for new residents exist in other countries too. It is a lawful optimisation tool, not a grey scheme — it is expressly provided for by tax law.
Domicile is the key to everything. The non-dom regime is available precisely because your permanent home is in another country; once your domicile changes, the relief disappears. That is why non-dom status is planned together with domicile, residence and the asset structure, and the rules change periodically — they are checked for currency.
A case from practice
An entrepreneur moves to a country with a non-dom regime while keeping the domicile of their country of origin. Their local income is taxed in the ordinary way, and foreign income only if they bring it into the country. As long as the rules are observed and the domicile has not changed, the regime gives a lawful saving.
Who non-dom status interests
- Wealthy residents with foreign income
- International entrepreneurs
- Those moving to a country with such a regime
- Long-term tax planning
- Owners of foreign assets
- Structuring worldwide income
03 / What it covers
How the non-dom regime works
Status
- A resident of the country
- Domiciled in another
- Often a new resident
Taxes
- Local income — as usual
- Foreign — preferentially
- Until brought into the country
Conditions
- Remittance rules
- A possible fixed charge
- Duration of the regime
Key
- Domicile in another country
- A change of domicile ends the relief
- A lawful regime
04 / How it works
How to use the regime
Check domicile and residence
Assess the country’s regime
Plan income flows
Observe the remittance rules
Lawful optimisation
05 / Key facts
What you need to know
01
A non-dom is a resident domiciled in another country
02
Foreign income is taxed preferentially, often until brought into the country
03
The classic example is the British non-dom regime
04
It is a lawful regime, not a grey scheme
05
A change of domicile ends the relief
Common mistakes
- Confusing non-dom status with full exemption from tax
- Not accounting for the remittance rules when transferring money
- Assuming the regime lasts forever — its conditions change
- Ignoring the link with domicile
- Planning without regard to CFC rules and exchange of information (CRS)
06 / Expert advice
How to prepare in advance
A non-dom regime is planned together with domicile, residence and the asset structure: it is checked that the domicile really is in another country, income flows are arranged in line with the remittance rules and the current conditions of the regime are verified (they change). Then the relief works lawfully and sustainably.
What we do for you. We work out whether a non-dom regime is available to you and how to use it lawfully: we check your domicile and residence, arrange income flows in line with the remittance rules and follow changes to the regime, so that the optimisation is sustainable.
Dmitry NagyTax consultant, international taxation and compliance (ex-Big4)
07 / Questions
Frequently asked questions
No. Local income is taxed in the ordinary way; the relief concerns foreign income — often until it is brought into the country. It is optimisation, not full exemption.
A rule under which foreign income is taxed only when it is brought into the country of residence. As long as the money stays abroad, no tax arises on it.
Residents whose domicile is in another country — often new residents. The key condition is domicile, not citizenship.
Yes, the conditions are reviewed periodically, including time limits and fixed charges. That is why the current rules are checked before planning.
Directly: the regime is available precisely because the domicile is in another country. A change of domicile ends the relief.
Yes, non-dom is an official regime expressly provided for by the tax law of a number of countries. It is important to observe its rules and reporting.
Related terms
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