The UK tax system loves its jargon, and few topics cause more head-scratching than residence, domicile, and the much-discussed non-dom

If you’ve lived abroad, have family overseas, or hold investments outside the UK, these terms might matter more than you realise – but they’re far less intimidating once broken down

Here’s NMTBP’s clear and friendly guide

What does ‘UK resident’ mean for tax?

Most people are UK residents without ever thinking about it. But if you spend part of the year abroad, own a home outside the UK, or split time with family elsewhere, the rules become important

The UK uses something called the Statutory Residence Test. In simple terms:

• Spend 183 days or more in the UK → you’re automatically UK-resident.
• Spend fewer days → your status depends on a mix of factors, such as whether you have a UK home, have close family here, or work here

Why it matters:
If you’re a UK resident, you usually pay UK tax on all income and gains – even from overseas

What is ‘Domicile’? Think of it as your long-term home

Domicile is an older legal concept and differs significantly from residence. It’s about where your deepest, long-term “home” is – not just where you’re living this year

Most people keep the domicile they were born in, called a domicile of origin, unless they make a permanent move abroad

Key point: You could live in the UK for decades and still not be considered ‘UK-domiciled’ if your long-term home, background, and future intentions lie elsewhere

Why it matters:
Domicile affects how your foreign income, overseas property, and even your estate may be taxed

What exactly is a ‘Non-Dom’?

A non-domiciled individual, or non-dom, is someone who lives in the UK and is resident here for tax purposes, but whose long-term home (domicile) is elsewhere

Historically, non-doms have been able to use special tax rules that don’t apply to UK-domiciled people

This doesn’t mean non-doms pay no tax. They pay UK tax on:

• Any income earned in the UK
• Any UK property gains
• But: foreign income and gains may only be taxed in the UK if the money is brought (“remitted”) into the UK

This is called the remittance basis, and it’s the heart of the non-dom system

For people who have lived in the UK for many years, this system may come with a charge if they choose to use it

Why do you need to be aware of these terms?

If any of the following apply, these rules may directly affect you:

• You’ve lived abroad and returned to the UK later in life
• You have overseas pensions, investments, savings, or rental properties
• You spend part of the year living overseas – for example, wintering in Spain or Portugal
• You’re planning inheritance, gifting, or succession arrangements
• You’re supporting children or grandchildren living abroad

Understanding your residence and domicile can make a real difference to tax planning and future financial decisions

Common misunderstandings (cleared up!)

“If I’m not resident, I don’t pay any UK tax”

Not quite. You still pay UK tax on most UK-sourced income – such as rental income from a UK property

“I lived abroad for 10+ years, so I must have changed my domicile”

Leaving the UK doesn’t automatically change your domicile. You usually need to move somewhere permanently and cut long-term ties

“Non-dom is the same as non-resident”

They’re completely different. Most non-doms are actually UK residents

“This only matters for the very wealthy”

It matters for anyone with foreign income, a home abroad, or children living overseas

A quick table to make it easy

Key Takeaway

The biggest confusion comes from mixing up residence (where you live now) with domicile (where your long-term home is)
Once you separate the two, everything becomes much clearer

If you:

• split your time between the UK and another country,
• have overseas investments or a pension, or
• are planning for your estate,

It’s especially worthwhile to understand these rules – and to get advice if something looks unusual