Where the UK’s Non-Doms Actually Went

The United Kingdom abolished the non-domiciled tax regime on 6 April 2025. From that date UK residents are taxed on worldwide income, and — the change that actually moved people — exposure to inheritance tax widened considerably. From 6 April 2026 a replacement arrived: a four-year foreign income and gains regime, open only to those who have been non-resident for at least ten consecutive years.

The forecasts were contested at the time. The Office for Budget Responsibility projected around 10,800 departures a year. A stakeholder survey by Oxford Economics found roughly 63% of non-doms planning or considering leaving, most citing inheritance tax rather than income tax. More than a year on, the useful question is not how many left but where they went, because the destinations reveal what these households were optimising for.

Four destinations, four different bets

The UAE — the volume winner

Dubai is the single most popular destination, and the reason is blunt: no personal income tax, no capital gains tax, no inheritance tax, and a residence route that is quick and well-trodden. For a household whose primary objection was inheritance tax on worldwide assets, the UAE removes the problem rather than reducing it.

The trade is distance, a legal system unfamiliar to most European families, and a lifestyle that suits some and not others. The UAE is chosen by people prioritising the tax outcome above everything else.

Italy — the lifestyle hedge with a moving price

Italy's lump-sum regime for new residents charges a flat annual amount on all foreign income, regardless of quantum, with family members added at €50,000 each per year. It started at €100,000, was doubled to €200,000 for new arrivals in August 2024, and the 2026 draft budget proposes raising it again to €300,000.

Two things follow. The regime is still transformative for very large foreign incomes, where a flat charge beats a percentage. And the direction of travel is one way — but Italian law protects grandfathering, so those who transferred residence and validly opted in before an increase continue at the amount in force when they moved. The €300,000 figure is a draft proposal and not yet law; anyone modelling Italy should confirm the enacted number before relying on it.

Cyprus — the EU-resident middle path

Cyprus offers what neither of the above does: EU membership, English as a business language, and a non-domicile regime exempting dividends, interest and rental income from the Special Defence Contribution for up to 17 years — now extendable twice by five years at €250,000 each. Its 60-day tax residency test suits people who remain genuinely mobile; we cover the 60-day rule and how non-doms actually qualify in full.

Cyprus is not free. Non-doms pay the health contribution of 2.65% on passive income, capped at €180,000 of income. What it buys is a defensible EU base at a fraction of Italy's lump sum.

Switzerland, Portugal, Greece, Malta and Ireland — the rest

Switzerland's lump-sum taxation appeals to the largest balance sheets willing to negotiate cantonally. Portugal, Greece and Malta take those prioritising climate and cost over headline rate. Ireland retains a remittance basis and the advantage of being an hour from London, which for families with UK businesses is not a small thing.

What the pattern shows

These households were not chasing the lowest rate. Had they been, the UAE would have taken nearly all of them. The spread across Italy, Cyprus and Switzerland — jurisdictions charging real money — says the binding constraints were inheritance tax exposure, proximity to family and business, and the durability of the regime itself.

That last one is doing more work than it appears. A household leaving the UK because a regime it relied on was abolished at fourteen months' notice is unlikely to move somewhere whose regime could be abolished on the same timescale. Italy's grandfathering provision is worth more to that buyer than the headline number, and Cyprus's seventeen-year statutory horizon is worth more than a marginally lower rate somewhere less predictable.

What to take away

• The UK abolished non-dom status on 6 April 2025 and replaced it from 6 April 2026 with a four-year FIG regime open only to those non-resident for ten or more years.
• Inheritance tax, not income tax, is the stated driver for most of those leaving. The OBR projected around 10,800 departures a year; Oxford Economics found about 63% considering it.
• Dubai leads on volume by removing the problem entirely. Italy, Cyprus and Switzerland take those who will pay real money for proximity and predictability.
• Italy's lump sum has gone €100,000 to €200,000, with €300,000 proposed in the 2026 draft budget — but movers are grandfathered at the rate in force when they relocated, which makes timing worth more than the headline.
• Regime durability is being priced as heavily as regime cost, which is the predictable consequence of abolishing one at short notice.