Owning UK property after the non-dom reform

In April 2025 the United Kingdom carried out its largest reform of international personal taxation in a generation. For anyone who owns London property — or is deciding whether to — the reform redrew the map. This is what changed, what did not, and what it means for an internationally mobile owner.

What changed in April 2025

The non-dom regime — which for decades allowed UK residents domiciled abroad to keep foreign income outside UK tax — was abolished from 6 April 2025. In its place stands a residence-based system with a much shorter window: new arrivals who have been non-UK-resident for at least ten years receive a four-year exemption on foreign income and gains, after which worldwide income is taxed in full.

Inheritance tax moved onto the same residence footing. Once you have been UK tax resident for ten of the last twenty years, you become a long-term resident and your worldwide estate falls within UK inheritance tax at 40% above the allowances — and that exposure does not end at the airport: it follows you for a period of years after you leave, scaling with how long you stayed. Domicile, the old anchor of the system, is now irrelevant.

What did not change: the property itself

For the asset, the rules are familiar — and it is worth being precise about them, because they are frequently misunderstood. UK residential property has always been within UK inheritance tax, wherever its owner lives, and it remains so. Rental income remains taxed in the UK at 20% to 45% through the Non-Resident Landlord Scheme. A sale remains subject to capital gains tax at 18% or 24%, reported within 60 days. Corporate wrappers still meet the Annual Tax on Enveloped Dwellings. Nothing in the 2025 reform worsened the position of a non-resident who simply owns a London flat — the reform was aimed at residents, not absentee owners.

The conclusion many owners are drawing

Put those two halves together and a clear pattern emerges — one visible among our own clients. The reform sharply raised the cost of being a UK resident while leaving the case for holding a UK asset from abroad essentially intact. The rational response, for many, is to separate the two decisions: keep the London property doing what it does best — preserving capital in one of the world’s deepest markets — and base yourself, and your personal tax residence, somewhere with a longer horizon.

That is where Cyprus enters the picture. Its non-dom regime runs for 17 years against the UK’s four, with 0% on worldwide dividends and interest, no inheritance tax of its own, and a residency route through property from €300,000 — the full mechanics are in our Cyprus non-dom guide on adens.cy. A London hold and a Cyprus base are not competing choices; increasingly, they are two halves of the same structure.

Three questions to settle before acting

First, your residence history: how many of the last twenty years were UK-resident, and what tail does that leave if you go? Second, the estate: UK property stays within UK inheritance tax whatever you do, so insurance, ownership shares and wills need to reflect that rather than wish it away. Third, the sequence: residence changes work best planned across tax years, not improvised mid-year. None of these questions is answered by a property adviser alone — and we would distrust any who claimed otherwise. We work alongside UK and Cyprus tax counsel, and we make sure the property decisions fit the structure they design.

The reform made UK residence expensive. It did not make London ownership a mistake — it made the base you hold it from a decision.

If you hold London property and are weighing where to base yourself — or you are planning the reverse journey, from the UK towards the Mediterranean — we can help you think through the property side of the structure, with the right professionals alongside.