Goodbye Non-Dom: Why More Brits Are Eyeing Lithuania Over Gibraltar for Tax Residency in 2025

Big changes are coming to the UK tax system. From 6 April 2025, the UK will finally scrap its centuries-old domicile-based tax regime. For non-doms, expats, and globally mobile Britons, this is a game-changer.

Instead of being taxed based on where you consider “home,” it will now be all about where you live—officially, that is.

The UK is switching to a residence-based system, which means if you spend enough time in the UK to be classed as a resident, you’ll be taxed on your worldwide income and gains, regardless of where it’s earned or kept.

This spells the end of the remittance basis, which previously allowed non-doms to pay UK tax only on income brought into the country.

And the biggest sting? Inheritance tax (IHT) is going residence-based too.

If you’ve lived in the UK for 10 of the last 20 years, your entire global estate could fall under the UK’s harsh 40% IHT net—even if you’ve since moved away.

So what now?

Gibraltar or… Lithuania?

Gibraltar is often touted as a sunny haven for ex-UK residents: zero inheritance tax, no capital gains tax, and lower income taxes. Sounds good, right? But if you’re planning to spend most of your time in Europe, Lithuania might be a smarter move.

Here’s why:

🔍 5 Reasons Lithuania Could Be the Better Choice for Non-Dom Brits

1. No Inheritance Tax (IHT)

Unlike the UK’s 40% rate, Lithuania has no inheritance tax for close relatives. Even for others, rates are a modest 5–10%. If you’re thinking about succession planning, this alone could save your estate millions.

2. Flat Tax Simplicity

Lithuania offers a flat personal income tax of 20%, and just 15% on dividends. Compare that to the UK’s tiered system which goes up to 45%, and you can see why some are calling this one of Europe’s hidden tax gems.

3. EU Residency Rights

Lithuania is an EU member. That means you get freedom of movement, access to Schengen travel, and EU healthcare and pension benefits. Gibraltar, post-Brexit, no longer offers those perks.

4. Mobility and Lifestyle

With strong digital infrastructure, fast-track residency options, and growing international communities, Lithuania appeals to remote workers, retirees, and internationally mobile families alike.

5. Still in Europe—Still Close to Home

Cheap flights, low living costs, and access to the rest of Europe make Lithuania a practical and affordable base. You’re not stuck on an outpost—you’re connected

Lithuania vs Gibraltar vs UK (2025)

Feature	UK (Post-2025)	Lithuania	Gibraltar
Inheritance Tax	40% (worldwide estate)	0% for close relatives	0%
Income Tax (top rate)	45%	20% flat	25% max
Remittance Basis	Abolished	N/A	N/A
EU Residency & Movement	❌ (post-Brexit)	✅	❌ (post-Brexit)
CGT on Foreign Assets	✅	Limited	❌

What Should You Do Now?

If you’re a Brit abroad—or planning to become one—your tax residency strategy needs to evolve. The end of the non-dom regime is not just a tax tweak. It’s a fundamental shift in how your income, investments, and estate will be taxed.

✅ Review your UK residency status carefully (check the Statutory Residence Test)

✅ Look into alternative EU residencies—Lithuania is one to watch

✅ Think beyond Gibraltar if you’ll spend significant time on the European mainland

✅ Speak to a cross-border tax adviser to get a full view of your options

Want help navigating the post-non-dom world?

We’re exploring tax strategies for Brits living part-time in Europe and will be covering more EU countries in the coming weeks. Stay tuned, or get in touch if you’d like a personalised breakdown at success@balticcapitalpartners.com OR, book a time directly in our diary for a chat.