In the UK, the "non-dom" tax regime is being replaced in April 2025 with a new system that allows individuals to be taxed on a remittance basis for a maximum of four years. Previously, individuals could hold non-dom status for up to 15 out of 20 years before becoming "deemed domiciled".
It is defined by intention, not duration. It continues until a domicile of choice is established in a different country.
The IRS 7-year rule primarily applies to keeping records for claiming a deduction for bad debts or losses from worthless securities, allowing a longer period to file for a credit or refund, but it's not a universal audit limit; it's often a recommended safe buffer for general record-keeping, with the standard IRS audit period usually being 3 years, extending to 6 years for substantial income omission (over 25%) or foreign income issues, and indefinitely for fraud.
The "90-day rule" for non-residents typically refers to two different concepts: in U.S. immigration, it's a guideline for determining if a non-immigrant misrepresented their intent by engaging in certain activities (like unauthorized work or immediate marriage) within 90 days of arrival, leading to visa fraud or inadmissibility. In Canadian tax law, the 90% rule allows non-residents to claim full federal tax credits if 90% or more of their world income is from Canadian sources, otherwise, credits are prorated.
The new Act effectively abolished the non-dom regime from April 2025, although the old rules remain relevant for offshore income and gains received before that date. In addition to raising new tax concerns, the 2025 changes will impact how former non-doms invest and how they hold their investments.
The upside risk is that non-doms have more foreign income and gains than estimated. The downside risks are that foreign income and gains are smaller than estimated and/or that non-doms respond more than UK doms to having their investment income taxed.
Non-doms and offshore trusts
From 6 April 2025 the protection from taxation on income and gains within settlor-interested trust structures is removed for those who do not qualify for the four-year FIG regime. FIG arising in these settlements is taxed on the UK resident settlor/transferor on an arising basis.
Who is considered a temporary non-resident? Individuals that leave the UK for fewer than 5 years (periods of 12 months, not tax years), and prior to leaving have lived in the UK for at least 4 out of 7 of the most recent years, can be treated as being a 'temporary non-resident' upon returning to the UK.
If you're in Canada for less than 183 days and don't have significant ties to the country—like a home or family here—you could be considered a non-resident. Non-residents are generally only taxed on income earned in Canada, not on worldwide income.
IRS regulations provide that a visitor who meets the Substantial Presence Test can still be treated as a nonresident alien if he meets the following tests: Present in the United States for fewer than 183 days in the current year and.
Yes, the IRS generally has a 10-year statute of limitations (Collection Statute Expiration Date or CSED) from the tax assessment date to collect unpaid taxes, meaning the debt usually goes away then; however, this clock can be paused or extended by certain events like filing for bankruptcy, entering installment agreements, or living abroad, and there's no time limit for fraud, says the IRS and tax professionals https://www.irs.gov/newsroom/taxpayer-bill-of-rights-6,.
The IRS $600 rule refers to a change in reporting requirements for third-party payment apps (like Venmo, PayPal) for taxable income from goods and services, where platforms must send a Form 1099-K if you receive over $600 in a year, intended to capture gig economy/side hustle income, though delays and phased implementation have adjusted the timeline, with current rules for 2024 using a higher threshold ($5,000) before fully phasing to $600 for future years, but remember all taxable income, regardless of form, must always be reported.
Under the pre-2020 rules, a property could retain its CGT-free status if sold within 6 years of moving out (or indefinitely if not rented). But now, if you're a foreign resident at the time of disposal, the 6-year rule provides no protection.
Individuals with 'non-dom' status can avoid UK tax on their foreign income and gains, provided these are not brought into the UK. If foreign income is below the £2,000 tax income threshold, it is tax-exempt unless remitted to the UK.
A non-domiciled individual in the U.S. lives in the country temporarily but legally considers another country their permanent home. While they may be physically present in the U.S., their domicile of origin, where they intend to return, remains elsewhere.
Residency is physically living somewhere. Domicile is physically living somewhere (or lived somewhere) and intent to remain (or intent to return if you're military). You CANNOT have a domicile for a state you have never lived in. You must have physically resided in a certain state to gain its benefits and protections.
In addition to the failure-to-file penalty, there is also a penalty for failing to pay taxes owed by the due date. This penalty is assessed based on the amount of unpaid taxes and accrues interest over time until the balance is paid in full.
In a nutshell, the 90% rule is simple: if 90% or more of your worldwide income is from Canadian sources in the tax year, you're eligible for non-refundable tax credits reserved for residents. That includes the basic personal amount and other credits that can really reduce your tax bill.
You may be considered a non-resident of Canada if you did not have significant residential ties with Canada and one of the following applies:
Non-dom UK Capital Gains Tax rates
Every individual is entitled to a capital gains tax free allowance (£3,000 in 2024/25) so only gains in excess of this allowance will be chargeable to capital gains tax. A UK resident non dom claiming the remittance basis will lose their entitlement to this allowance.
The 183-day rule is a common global standard used to determine tax residency, marking the period of physical presence required in a nation within a calendar year.
Non-resident Indians (NRIs) are taxed on income earned or collected in India. This could be from sources like property rent, share dividends, and investment and savings capital gains, if over a specified limit. Income earned outside India is not taxable in India.
Overseas tests
You're usually non-resident if either: you spent fewer than 16 days in the UK (or 46 days if you have not been a UK resident for the 3 previous tax years) you worked abroad full-time (averaging at least 35 hours a week), and spent fewer than 91 days in the UK, of which no more than 30 were spent working.
You may have to pay tax when you sell (or 'dispose of') your UK home if you're not UK resident for tax purposes. Even if you have no tax to pay, you must tell HMRC you've sold the property within 60 days of transferring ownership (conveyancing).