The UK government recently announced significant tax reforms that are sending ripples through global wealth corridors, particularly among High-Net-Worth Individuals (HNWIs) across the world —including Nigeria.
As these changes take shape, it is critical for globally mobile Nigerians with UK investments, property, or residency plans to understand the key implications.
KEY HIGHLIGHTS OF THE REFORMS
- Abolition of the Non-Domicile ("Non-Dom")
Regime – Effective April 2025
- The remittance basis that allowed UK residents to avoid tax on overseas income and gains (worldwide income) has been replaced with residence-based taxation.
- A 4-year foreign income and gains (FIG) exemption for new UK residents, who haven't been UK residents for up to 10 years.
- New Rules on Overseas Trusts
- Previously exempt offshore trusts created by non-doms will now be subject to UK tax once the settler becomes deemed domiciled in the UK.
- UK Inheritance Tax (IHT) Shake-Up (Effective
April-2025)
- The scope of IHT may broaden to capture worldwide assets held by long-term residents, that is individuals who have been UK tax residents for at least 10 out of the last 12 years. including non-UK domiciled individuals.
- Capital Gains Tax & Income Tax
Adjustments
- The UK has revised its tax rules affecting real estate investments and offshore corporate structures. These changes could significantly impact Nigerian investors with UK property portfolios or offshore holding companies.
For example, a Nigerian investor who owns properties through a BVI company may now be liable to pay UK Capital Gains Tax not only when selling the properties directly, but also when selling shares in the offshore company that owns them.
Why This Matters for Nigerian HNWIs
Many Nigerian HNWIs maintain strong links with the UK through:
- Children's education,
- Property and real estate ownership,
- Residency and lifestyle migration,
- Cross -border Investment diversification.
These reforms may affect:
- Tax exposure on global income, including Nigerian-earned income, when resident in the UK.
- Estate planning structures, especially those involving UK-based trusts or property.
- Corporate holdings and offshore trusts, particularly where the UK is involved directly or indirectly.
Recommended Actions
- Conduct a full review of all UK-linked estate structures and offshore trusts.
- Reassess residency plans considering the abolished non-dom regime.
- Seek legal and tax advice on restructuring and compliance
- Explore alternative jurisdictions with more favorable tax regimes for wealth planning, education or residency.
Let DCSL Guide You
At DCSL, we specialize in cross-border wealth structuring, tax advisory, and legal support for HNWIs. Our team is tracking these UK changes closely and is ready to help you adapt your structures proactively.
Originally published 2025-07-22
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
