Q: Do international professionals still benefit from the non‑dom system after 2025?

Yes, under the new Foreign Income & Gains (FIG) regime. New arrivals enjoy four years of tax‑free foreign income if non‑resident for the previous ten years. Existing non‑doms should realise or rebase foreign gains before April 2025.

Question 1

Can pension contributions reduce my additional‑rate tax?

Accepted Answer

Yes — they reduce your adjusted net income, potentially restoring your personal allowance

Question 2

What is the 62% tax trap?

Accepted Answer

It occurs between £100,000–£125,140 due to loss of personal allowance, raising the effective tax rate to 60%+.

Question 3

Is salary sacrifice still worthwhile at the 45% rate?

Accepted Answer

Yes — it saves both income tax and NI. Employers also save NI, often reinvesting it into your pension

Question 4

: How does EIS differ from VCT?

Accepted Answer

EIS targets direct investments in private firms (higher risk), while VCTs are managed funds offering diversification

Question 5

Can I claim relief on foreign income?

Accepted Answer

Yes, under double tax treaties or via the foreign tax credit system — depending on residency status.

Question 6

How do I avoid HMRC scrutiny while optimising tax?

Accepted Answer

Stay within compliant, mainstream reliefs (pensions, EIS, Gift Aid) and avoid marketed tax avoidance schemes.

Question 7

What’s the tax advantage of electric company cars in 2025/26?

Accepted Answer

Benefit‑in‑Kind (BiK) rates on electric vehicles remain at 2% until 2025 — far lower than petrol equivalents (~30%). When combined with salary sacrifice, EVs save 40–60% versus purchasing privately.

Question 8

Do international professionals still benefit from the non‑dom system after 2025?

Accepted Answer

Yes, under the new Foreign Income & Gains (FIG) regime. New arrivals enjoy four years of tax‑free foreign income if non‑resident for the previous ten years. Existing non‑doms should realise or rebase foreign gains before April 2025.

Question 9

How can I optimise Capital Gains Tax in London’s property market?

Accepted Answer

Use spousal transfers, annual exemptions (£3,000 each), and EIS reinvestment to defer or eliminate gains. Selling across tax years can further reduce exposure. Property incorporation may defer CGT for landlords running active property businesses.

Question 10

What if my income fluctuates year to year?

Accepted Answer

Plan flexibly. In high‑income years, prioritise pension top‑ups and donations. In lower‑income years, realise gains or dividends to utilise unused bands. Annual forecasting, each December–February, ensures optimal alignment.

Category: High NetWorth client

Tax Efficiency in London: Insights for Additonal Rate Earners