• Chris Goddard, Director |

Abolishment of the UK resident non-domiciled ("UKRND") regime

UKRND individuals are a very important part of the client base of many Swiss banks. These are usually high (or even ultra-high) net worth individuals.  For years, the current rules have allowed UKRNDs to elect not to pay UK tax on their overseas income and gains for up to 15 years (as long as the overseas income and gains were not remitted to the UK), and to significantly reduce their UK inheritance tax exposure.

The UK Chancellor has announced that the UKRND regime will be abolished with effect from 6 April 2025, and will be replaced with a “simpler and fairer” regime.  A consultation on changes to the UK inheritance tax regime has also been announced.

The new regime

For any new UK residents from 6 April 2025 (who had not been resident in the UK for the 10 preceding years), they will not have to pay UK tax on their overseas income and gains for the first 4 years of UK residence (with no restriction on remitting such amounts to the UK). After 4 years of UK residence, they will be taxed on worldwide income and gains like any other UK resident. A complex range of transitional rules apply for existing UKRNDs at 6 April 2025 (refer to this separate blog for further details). 

What should Swiss banks be doing now?

  • Communication with clients: Swiss banks should be proactively reaching out to all their existing UKRND clients to understand how they plan to react to the change in the UK tax regime. 
  • Cross-border relocations: Some existing UKRNDs are likely to leave the UK in response to this announcement. By staying close to their clients, Swiss banks will be able to support such clients as they relocate and reorganize their financial affairs. Some UKRNDs may even consider relocating to Switzerland.
  • Wealth management opportunities: The change in tax regime may encourage some individuals (both existing UKRNDs as well as prospective new residents) to restructure wealth (e.g. using trusts), for which it will be expected that their Swiss bank is knowledgeable on the options available.
  • Account segregation service offering: This will no longer be necessary for new UK residents from 6 April 2025, and Swiss banks will need to ensure their service offering for such clients is adapted accordingly. However, existing UKRNDs may still need to maintain their existing account segregation for historic income and gains. This has the potential to cause confusion for Swiss banks on when account segregation is essential, and when not.
  • Investing into UK situs assets: Currently, Swiss banks typically avoid investing into any UK situs assets for UKRND clients, often relying on flags provided by data service providers (e.g. SIX) to block such securities. From 6 April 2025, this will only be necessary for the first 4 years of UK tax residence, after which there will no longer be any need to avoid such assets. Swiss banks will need to determine what policy they wish to apply here and how this will be implemented operationally (e.g. continue to block UK situs securities for such clients indefinitely, or open up this investment market after 4 years).  
  • Revision of existing UKRND policies / guidance / forms: Swiss banks that have an existing UKRND policy or internal guidance document will need to consider making revisions to the documents to reflect the new regime. This applies equally to any UKRND specific forms that Swiss banks use (e.g. UKRND self-declaration forms, or UKRND client instruction forms).
  • Training: In order to seize the full potential of the change in regime, it is essential that key personnel within the Swiss bank, in particular (1) relationship managers covering the UK market, as well as (2) relevant middle- / back-office personnel (tax, legal, compliance), are properly trained on the new tax regime. 
  • Interaction with the US Qualified Intermediary (QI) regime: Until now, UKRNDs claiming the remittance basis of taxation have not been eligible to benefit from reduced US withholding tax rates under the UK-US double tax treaty. This may change from 6 April 2025 (it will depend on the wording in the legislation for the new regime, which is not yet available). If this change is confirmed (watch this space!), Swiss banks that are QIs may wish to collect new documentation after 6 April 2025 from their UKRND clients to enable treaty relief on US source income. 


There are lots that Swiss banks could (and even should) be doing in response to the UKRND regime change. Doing nothing is not one of them! KPMG is able to support Swiss banks with designing and implementing a new UKRND policy – please reach out to our specialists for advice.