UK vs Malta: Tax Residency Non-Dom Programs. Reform in UK & 6 Reasons to Relocate Tax Status to Malta

UK vs Malta: Tax Residency Non-Dom Programs. Reform in UK & 6 Reasons to Relocate Tax Status to Malta

Click here to view the May newsletter

In the realm of international finance and taxation, strategic planning is paramount for individuals seeking to optimize their tax liabilities while complying with legal frameworks. One such strategy involves transitioning from the UK Non-Dom (non-domiciled) regime to Malta, a move that can offer significant tax advantages and broader financial opportunities. In this article, we delve into the nuances of this transition, exploring the benefits and considerations for individuals and businesses alike.

Understanding the UK Non-Dom Regime

The UK Non-Dom regime has long been an attractive option for individuals with connections to the UK but domiciles elsewhere. Tax residents, not domiciled in the UK, could benefit from favorable tax treatment on income earned outside the UK, provided it is not remitted to the UK. However, a reform is scheduled for the next year and a new residency-based scheme shall take an affect from April 2025.

Core amendments:

  • Remittance basis of taxation for non-doms will be abolished (tax residents will pay UK tax on any foreign income and gains, as is the case of other UK residents)
  • For new arrivals: 100% UK tax relief on foreign income and gains for the first 4 years only
  • Transitional agreement in place for current non-doms (contact us for more details)
  • Treatment of non-UK assets settled into a trust by a non-UK domiciled settlor prior to April 2025 will not change

While previous non-dom regime has historically offered tax advantages, recent changes in UK tax laws have diminished majority of those, prompting many to explore alternative jurisdictions.

Among the options, Malta stands out as a promising destination for those looking for financial stability and growth.

Enter Malta: A Hub for Tax Efficiency

Malta, situated strategically in the heart of the Mediterranean, has emerged as a premier destination for tax-efficient residency. Its robust legal framework, coupled with a favorable tax regime, makes it an enticing option for individuals and businesses seeking to optimize their tax position.

Key Advantages of Transitioning to Malta

Remittance based Taxation: Unlike the UK, which shall tax worldwide income for all residents, Malta operates on a remittance-based system. This means that individuals are only taxed on income remitted to Malta, offering substantial savings for those with significant overseas earnings:

  • 0% tax on foreign income, not remitted to Malta;
  • 15% on income, remitted to Malta, or €15.000 per annum – still one of the lowest rate in Europe;
  • 0% capital gains tax: remitted to Malta or not;
  • 0% inheritance tax.

Double taxation relief

Malta has an extensive network of double taxation treaties with over 70 countries, ensuring that individuals are not subject to double taxation on their income. This provides added peace of mind for non-domiciled individuals who have income derived from multiple jurisdictions.

Residency Programmes

Malta offers several residency programmes tailored to the needs of different individuals, including the Global Residence, Tax Residency, or Retirement Programmes.

No Residency Requirement

There is no requirement to live in Malta all year around. However, the applicant should avoid staying in any other country for more than 183 days a year.

Wealth Management

Malta offers a range of investment structures, including trusts and foundations, which can provide additional tax benefits and asset protection. More information about Trusts and Foundations of Malta you may find here.

Stable Legal Environment

Malta’s legal system is based on English common law, providing familiarity and certainty for individuals accustomed to the UK legal framework. Moreover, Malta’s membership in the European Union ensures compliance with EU regulations and access to the EU Single Market.

As you may see, transitioning from the UK Non-Dom regime to Malta offers significant number of tax benefits, secure legal framework and flexibility.

However, careful planning and expert guidance are essential for navigating a changeover successfully. By understanding the advantages and considerations involved, you can take informed decisions, enhance your financial position and achieve any long-term goals.

We are here to guide you! Contact us now!

Click here to view the May newsletter