Both Malta and the United Kingdom have historically operated non-domiciled tax regimes based on the remittance principle.

However, following the UK’s abolition of its non-dom system effective 6 April 2025, Malta now stands as one of Europe’s premier jurisdictions offering enduring non-dom tax benefits.

This comparative analysis examines the structural, operational, and strategic differences between Malta’s continuing res-non-dom framework and the UK’s discontinued regime, providing insights for international tax advisors, wealth managers, and prospective residents.

• Unlimited Duration: Lifetime non-dom status vs UK’s 4-year maximum
• Capital Gains Exemption: Foreign gains tax-free even if remitted vs UK taxation at 10-28%
• Zero Inheritance Tax: No IHT, estate, or gift taxes vs UK’s 40% IHT
• Perpetual Remittance Basis: Indefinite remittance benefits vs UK worldwide taxation
• Specialised Programmes: Tailored 15% flat-rate options vs UK one-size-fits-all

• Lower Living Costs: 16-52% cheaper than UK, particularly housing and utilities
• Superior Healthcare: WHO ranked 5th globally vs UK 18th, with shorter waiting times
• Mediterranean Climate: 300+ sunny days vs UK’s 150-170, promoting wellbeing
• Policy Stability: 80-year unchanged framework vs UK’s recent complete abolition
• EU Membership: European access and Single Market unavailable in post-Brexit UK

The UK’s non-domiciled tax regime, operational for over 200 years, was rooted in the common law concept of domicile—an individual’s permanent home determined by birth, choice, or dependency. The system allowed UK tax residents who maintained a non-UK domicile to elect for remittance basis taxation, paying UK tax only on UK-source income and foreign income/gains remitted to the UK.

Legislative Basis: Income Tax Act 2007, Taxation of Chargeable Gains Act 1992, Inheritance Tax Act 1984

Key Historical Features:

• Remittance basis available to non-UK domiciled individuals
• Annual remittance basis charge: £30,000 (7+ years UK residence) or £60,000 (12+ years)
• Deemed domicile rule: Automatic UK domicile after 15 of 20 years UK residence (introduced 2017)
• Protected trust structures for offshore assets
• Inheritance tax protection for non-UK assets

Abolition: Effective 6 April 2025, the UK government abolished the non-dom regime, replacing it with a residence-based system that eliminates the concept of domicile from income and capital gains taxation.

Malta’s resident non-domiciled tax system derives from the Income Tax Act, Chapter 123, introduced during British colonial governance in the 1940s, establishing a familiar Anglo-Saxon tax framework adapted to Malta’s strategic positioning as a Mediterranean financial centre.

Legislative Basis: Income Tax Act (Cap. 123), Income Tax Management Act (Cap. 372)

Key Features:

• Remittance-based taxation for residents not domiciled in Malta
• No deemed domicile rule – non-domiciled status available indefinitely
• Minimum annual tax: €5,000 (waived if foreign income below €35,000)
• Foreign capital gains fully exempt, even if remitted
• No inheritance, wealth, estate, or gift taxes
• Extensive double tax treaty network (80+ jurisdictions)

Continuity: Unlike the UK, Malta has reinforced its commitment to the res-non-dom framework, positioning the jurisdiction as a stable, predictable alternative for international taxpayers.

Analysis
Malta’s absence of a deemed domicile rule provides structural permanence absent in the former UK system.

UK non-doms faced automatic conversion to UK-domiciled status after 15 years of UK residence, forcing worldwide taxation. Malta imposes no such limitation, allowing individuals to maintain res-non-dom status for decades.

Analysis

Both systems exempt unremitted foreign income. However, Malta’s structure is more cost-effective:

No annual charge equivalent to the UK’s £30,000-£60,000 remittance basis fee
Flat-rate options available (15% under GRP/MRP) provide predictability
Lower minimum tax (€5,000 vs £30,000-£60,000) reduces cost of claiming non-dom benefits

Critical Distinction

Malta provides a unique advantage by exempting foreign capital gains even when remitted to Malta. The UK historically taxed remitted foreign gains at substantial rates (10%-28%), creating significant friction for portfolio realisation.

Strategic Implication

Malta resident-non-domiciles can liquidate foreign investments, realise capital gains, and transfer proceeds to Malta tax-free—a feature unavailable under the UK system.

Analysis

Malta’s absence of inheritance, estate, and gift taxes provides substantial estate planning advantages. The UK imposed inheritance tax at 40% on worldwide estates for deemed domiciles and long-term residents, creating significant transfer costs.

Post-April 2025, the UK transitioned to a residence-based IHT system, imposing worldwide IHT on individuals resident for 10 of the preceding 20 years. Malta maintains its zero-rate policy.

Effective 6 April 2025, the UK replaced its non-dom system with a residence-based foreign income and gains (FIG) regime:

• Eligibility: New UK arrivals non-resident for 10+ consecutive prior years
• Duration: 4 tax years of UK residence
• Benefit: 100% relief on foreign income and gains (no remittance requirement)
• After 4 Years: Worldwide taxation at standard UK rates

• Temporary Repatriation Facility (TRF): 12% tax rate (2025/26-2026/27) or 15% (2027/28) for pre-April 2025 foreign income/gains remitted to UK
• Asset Rebasing: Foreign assets held on 5 April 2017 rebased to that date’s value for CGT purposes
• 50% Relief: For 2025/26 only, qualifying former non-doms can elect 50% taxation on foreign income

• Residence-based: 10+ years UK residence in preceding 20 years triggers worldwide IHT
• Trust protections for pre-October 2024 settlements partially preserved

The UK’s policy shift eliminates long-term non-dom benefits, fundamentally altering the jurisdiction’s attractiveness:

Key Impacts:

• Maximum 4-year relief vs unlimited duration under historical regime and Malta’s indefinite system
• Worldwide taxation after 4 years regardless of remittance
• Loss of trust protections for new settlors
• IHT exposure after 10 years residence
• Increased compliance complexity during transitional period

Over 10,000 millionaires departed the UK in 2024—a 157% increase year-over-year—driven partly by non-dom abolition uncertainty. Alternative jurisdictions, particularly Malta, have benefited from this outflow.

Malta’s res-non-dom regime now offers superior structural benefits
compared to the post-2025 UK system:

For Foreign Income Remitted to Jurisdiction:

Analysis

While the UK’s 4-year FIG relief is generous initially, Malta provides long-term certainty with perpetual remittance-based treatment and capital gains exemptions.

Example: High-Net-Worth Individual – €500,000 annual foreign income, €100,000 foreign capital gains

• Remit €100,000 to Malta for living expenses
• Keep €300,000 offshore (tax-free)
• Realise €100,000 capital gains, remit to Malta – 0% tax-free
• Malta Tax: €100,000 × 15% = €15,000
• Total Tax: €15,000 – Malta only, with UK tax credits available

• Worldwide taxation: €500,000 + €100,000 = €600,000 taxable
• UK Tax (approximate): €600,000 × 40% marginal = €240,000
• Total Tax: €240,000

Annual Savings in Malta: €195,000 (88% reduction)
This simplified illustration demonstrates Malta’s compelling fiscal advantage for internationally mobile taxpayers.

Malta offers tailored residency programmes that integrate seamlessly with res-non-dom taxation:

• 15% flat tax on foreign income remitted to Malta
• Minimum tax: €15,000 annually
• Property requirement: Purchase €275k+ or rent €9,600+ annually
• No minimum stay requirement

• 15% flat tax on foreign pension income remitted
• Minimum tax: €7,500 (main applicant) + €500 (dependents)
• Minimum stay: 90 days annually (5-year average)
• Ideal for retirees with pension income

• Standard res-non-dom taxation – €5,000 minimum
• Permanent residency with no expiry
• Higher upfront cost – €60,000 government fee
• No minimum stay requirement

The UK’s post-2025 system offers no specialised residence programmes with preferential tax treatment. The FIG regime is a blanket policy available to all qualifying new arrivals, with no tailored options for retirees, investors, or specific income profiles.

Implication: Malta’s programme diversity allows customised tax planning based on individual circumstances—flexibility absent in the UK’s standardized approach.

Stability: Malta’s res-non-dom framework has remained fundamentally unchanged for 80 years, providing exceptional policy certainty.

Uncertainty: Recent reforms and ongoing policy debates create greater regulatory risk compared to Malta’s stable framework.

Malta’s res-non-dom regime is optimal for:

• Long-term international residents seeking indefinite non-dom benefits without deemed domicile concerns
• Investors with significant foreign portfolios who wish to realize capital gains tax-free when remitted
• Retirees with foreign pensions seeking predictable 15% flat-rate taxation
• High-net-worth families prioritizing zero inheritance/estate/gift tax environments
• Individuals requiring EU access while maintaining tax efficiency
• Those valuing policy stability and regulatory predictability

The UK’s new FIG regime may appeal to:

• Short-term assignees planning 4 years or less in the UK
• Individuals with substantial ongoing UK business interests requiring UK presence
• Those prioritizing UK lifestyle, education, and business ecosystem over tax optimization
• Individuals willing to accept worldwide taxation after the 4-year period

Following the announcement of non-dom abolition, the UK experienced a 157% increase in millionaire departures in 2024, with over 10,000 HNW individuals leaving.

Primary destinations: Malta, Switzerland, Monaco, Dubai, Italy, Portugal—jurisdictions offering tax-efficient residency alternatives.

Malta has seen substantial growth in British and international HNW residents relocating from the UK, attracted by:

• Stable, proven non-dom framework
• EU membership and English language
• Mediterranean lifestyle and climate
• Proximity to UK (3-hour flight)
• Established international community

The abolition of the UK’s non-domiciled tax regime marks a watershed moment in international tax policy, fundamentally altering the competitive landscape for jurisdictions attracting internationally mobile wealth.

Malta’s resident non-domiciled system—stable, predictable, and structurally superior—has emerged as the premier European alternative for high-net-worth individuals, retirees, and investors seeking tax-efficient residence within the European Union.

Key Differentiators

For international tax advisors, wealth managers, and clients navigating the post-UK-non-dom landscape, Malta represents not merely an alternative, but an enhanced, enduring solution for optimising global tax positions while maintaining European residence, market access, and lifestyle quality.

The contrast between Malta’s stable, taxpayer-friendly framework and the UK’s restrictive, time-limited replacement regime underscores a broader trend: jurisdictions offering predictable, long-term tax certainty will increasingly attract mobile capital and talent in an era of fiscal volatility and policy experimentation.

Acumum Legal & Advisory offers tailored Malta tax planning services for UK individuals and companies relocating to Malta, covering strategic residency, remittance basis, dividend structuring, and personal/family wealth optimisation.

Our multidisciplinary team is well-versed in the Maltese tax environments, ensuring solutions that comply with double tax treaties and take full advantage of Malta’s internationally recognised system.

• Guidance on Maltese residency acquisition, including permanent and special tax status programs for UK citizens.
• Optimisation of domicile status for maximum use of Malta’s remittance basis: UK expatriates are taxed only on Malta-source income and foreign income remitted to Malta, while untaxed overseas income may be free from Maltese tax.
• Advice on securing flat-rate tax schemes (15% on remitted foreign income, with annual minimums) and exemptions for capital gains derived from overseas.

• Structuring to avoid double taxation using the UK–Malta double tax treaty, allowing clients to claim exemptions and credits for income, pension, and other cross-border receipts.
• Expert coordination for international tax returns, compliance filings, and claims under both jurisdictions.

• Design of efficient holding and trading structures using Malta companies to benefit from low effective corporate tax rates (as low as 5% after refunds) and Malta’s participation exemption for qualifying foreign dividends and capital gains.
• Estate and succession planning, integration of trusts, foundations, and family office services to optimise intergenerational wealth transfer and asset protection.
• Tailored advice on VAT, real estate, and financial investments, leveraging Malta’s practical rules for UK expats.

• Annual tax return preparation and audit coordination, including proactive advice on changing UK and Malta residency rules and compliance requirements.
• Ongoing monitoring of regulatory developments e.g., UK non-dom reforms and Malta residency updates, ensuring strategies remain optimal and compliant.

What this means for you: UK clients relocating to Malta can use Acumum Legal & Advisory’s expertise to secure residency, minimise global and local tax exposure, and implement tailored, compliant wealth and estate plans. Leveraging their UK-Malta dual capability provides both risk reduction and robust fiscal benefits in the post-Brexit landscape.

We at Acumum provide Maltese legal and tax advice. We are not UK tax advisers and you should consult a qualified UK tax adviser as to your particular situation.

If you would like to know more about Malta’s benefits for you and / or your business, please contact us.