KEY REASONS FOR RELOCATING FROM THE UK TO MALTA

𝐊𝐄𝐘 𝐑𝐄𝐀𝐒𝐎𝐍𝐒 𝐅𝐎𝐑 𝐑𝐄𝐋𝐎𝐂𝐀𝐓𝐈𝐍𝐆 𝐅𝐑𝐎𝐌 𝐓𝐇𝐄 𝐔𝐊 𝐓𝐎 𝐌𝐀𝐋𝐓𝐀

𝐓𝐚𝐱 𝐑𝐞𝐬𝐢𝐝𝐞𝐧𝐜𝐲 𝐢𝐧 𝐌𝐚𝐥𝐭𝐚 – 𝐀𝐝𝐯𝐚𝐧𝐭𝐚𝐠𝐞𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐫𝐞𝐦𝐢𝐭𝐭𝐚𝐧𝐜𝐞 𝐛𝐚𝐬𝐢𝐬 𝐨𝐟 𝐭𝐚𝐱𝐚𝐭𝐢𝐨𝐧 𝐟𝐨𝐥𝐥𝐨𝐰𝐢𝐧𝐠 𝐭𝐡𝐞 𝐩𝐫𝐨𝐩𝐨𝐬𝐞𝐝 𝐜𝐡𝐚𝐧𝐠𝐞𝐬 𝐭𝐨 𝐭𝐡𝐞 𝐔𝐊 𝐭𝐚𝐱 𝐫𝐞𝐠𝐢𝐦𝐞 𝐟𝐨𝐫 𝐧𝐨𝐧-𝐝𝐨𝐦𝐢𝐜𝐢𝐥𝐞𝐝 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥𝐬

The proposed changes to the UK's tax regime, effective from 6 April 2025, represent a significant shift in how non-UK domiciled individuals are taxed. This transition from the current remittance-basis rules to a residence-based system marks a substantial change.


𝐊𝐞𝐲 𝐂𝐡𝐚𝐧𝐠𝐞𝐬 𝐭𝐨 𝐭𝐡𝐞 𝐔𝐊 𝐓𝐚𝐱 𝐑𝐞𝐠𝐢𝐦𝐞

1. 𝐖𝐨𝐫𝐥𝐝𝐰𝐢𝐝𝐞 𝐈𝐧𝐜𝐨𝐦𝐞 𝐚𝐧𝐝 𝐆𝐚𝐢𝐧𝐬 𝐓𝐚𝐱𝐚𝐭𝐢𝐨𝐧: Non-domiciled individuals who have been UK residents for more than four years will be subject to UK tax on their worldwide income and gains, regardless of where the income or gains are generated.

2. 𝐅𝐈𝐆 𝐑𝐞𝐠𝐢𝐦𝐞 𝐈𝐦𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬: Opting into the new Foreign Income and Gains (FIG) regime removes entitlement to personal allowances and the capital gains tax exemption.

3. 𝐓𝐞𝐦𝐩𝐨𝐫𝐚𝐫𝐲 𝐑𝐞𝐩𝐚𝐭𝐫𝐢𝐚𝐭𝐢𝐨𝐧 𝐅𝐚𝐜𝐢𝐥𝐢𝐭𝐲 (𝐓𝐑𝐅): Individuals can repatriate pre-6 April 2025 foreign income and gains at a reduced tax rate of 12% during the 2025-2027 period.

4. 𝐍𝐨𝐧-𝐔𝐊 𝐑𝐞𝐬𝐢𝐝𝐞𝐧𝐭𝐬: Non-UK residents who have not been in the UK for the preceding 10 tax years will be eligible to benefit from the FIG regime for up to four years once they become UK residents.

5. 𝐑𝐞𝐬𝐢𝐝𝐞𝐧𝐜𝐞-𝐁𝐚𝐬𝐞𝐝 𝐈𝐧𝐡𝐞𝐫𝐢𝐭𝐚𝐧𝐜𝐞 𝐓𝐚𝐱: The UK government plans to introduce a residence-based Inheritance Tax (IHT) system, where worldwide assets will be subject to UK IHT once an individual has been a UK resident for 10 years. This rule will continue to apply for 10 years after leaving the UK.

6. 𝐓𝐫𝐮𝐬𝐭 𝐏𝐫𝐨𝐭𝐞𝐜𝐭𝐢𝐨𝐧𝐬 𝐑𝐞𝐦𝐨𝐯𝐚𝐥: Trust protections for non-domiciled and deemed domiciled individuals who do not qualify for the FIG regime will be removed. Consequently, trust income and gains will be taxed on UK-resident settlors or transferors as they arise.


𝐎𝐩𝐩𝐨𝐫𝐭𝐮𝐧𝐢𝐭𝐢𝐞𝐬 𝐢𝐧 𝐌𝐚𝐥𝐭𝐚

Malta presents an attractive alternative for non-UK domiciled individuals currently residing in the UK due to its favourable remittance-basis tax regime.

𝐌𝐚𝐥𝐭𝐞𝐬𝐞 𝐓𝐚𝐱 𝐒𝐲𝐬𝐭𝐞𝐦 𝐟𝐨𝐫 𝐑𝐞𝐬𝐢𝐝𝐞𝐧𝐭 𝐍𝐨𝐧-𝐃𝐨𝐦𝐢𝐜𝐢𝐥𝐞𝐝 𝐈𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥𝐬

• 𝐈𝐧𝐜𝐨𝐦𝐞 𝐢𝐧 𝐌𝐚𝐥𝐭𝐚: All income, including capital gains arising in Malta, is subject to tax regardless of where it is received.

• 𝐅𝐨𝐫𝐞𝐢𝐠𝐧 𝐈𝐧𝐜𝐨𝐦𝐞: Foreign income is taxed in Malta only when it is remitted to Malta. This income is taxed at favourable progressive rates compared to some other jurisdictions.

• 𝐅𝐨𝐫𝐞𝐢𝐠𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐆𝐚𝐢𝐧𝐬: Foreign capital gains are not taxed in Malta, even when funds are received in or remitted to Malta.

• 𝐌𝐢𝐧𝐢𝐦𝐮𝐦 𝐓𝐚𝐱: Resident non-domiciled individuals in Malta face a minimum annual tax liability of €5,000 if their foreign income exceeds €35,000. This applies to spouses as well.

• 𝐈𝐧𝐡𝐞𝐫𝐢𝐭𝐚𝐧𝐜𝐞 𝐓𝐚𝐱: Inheritance is not taxed in Malta, even when funds are received in or remitted to Malta.

• 𝐃𝐨𝐮𝐛𝐥𝐞 𝐓𝐚𝐱𝐚𝐭𝐢𝐨𝐧 𝐑𝐞𝐥𝐢𝐞𝐟: Malta's extensive network of over 70 double taxation treaties enhances its appeal as a tax jurisdiction for non-domiciled individuals. These treaties ensure that individuals are not subject to double taxation on their income, providing peace of mind for those with cross-border financial interests.


𝐎𝐭𝐡𝐞𝐫 𝐀𝐝𝐯𝐚𝐧𝐭𝐚𝐠𝐞𝐬 𝐢𝐧 𝐌𝐚𝐥𝐭𝐚

• 𝐑𝐞𝐬𝐢𝐝𝐞𝐧𝐜𝐲 𝐏𝐫𝐨𝐠𝐫𝐚𝐦𝐦𝐞𝐬: Malta offers several residency programmes tailored to different types of individuals, including those seeking tax efficiency, lifestyle benefits, or retirement opportunities. These programmes provide flexibility and a range of advantages, making Malta a popular choice for non-UK domiciled individuals, retirees, and high-net-worth individuals.

• 𝐖𝐞𝐚𝐥𝐭𝐡 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭: Malta is an attractive jurisdiction for wealth management, offering a range of investment structures such as trusts and foundations. These structures provide tax benefits and ensure robust asset protection, making them ideal for high-net-worth individuals, including non-UK domiciled individuals.

• 𝐋𝐞𝐠𝐚𝐥 𝐅𝐫𝐚𝐦𝐞𝐰𝐨𝐫𝐤:Malta's legal system combines familiarity for individuals from the UK with certainty for those navigating local and EU regulations. This combination makes Malta a stable and attractive destination for non-UK domiciled individuals, especially given the upcoming changes to the UK's tax regime.

Malta provides a solid foundation for those looking for stability and efficiency in their tax planning post-2025. However, ensuring that your tax residency and international financial affairs are managed correctly is essential to optimising benefits and avoiding complications. With the right planning, you can achieve long-term success and financial security in a changing global tax environment.

This Publication only intends to purport general information and is not intended to be a definitive or a comprehensive analysis of the subject and should not be acted upon or deemed to be considered as advice. RADIX GROUP accepts no liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication.

Contact our team on antoinette.scerri@radixmalta.com or benjamin.zammitmckeon@radixmalta.com for expert advice tailored to your circumstances.