If you’re domiciled outside of the UK for tax, you’ll need to get yourself up to speed on the recent announcement from the new Labour government regarding ‘non-dom’ status.
As the recent policy note from HM Treasury outlines, ‘the government is committed to addressing unfairness in the tax system, so that everyone who is long-term resident in the UK pays their taxes here’. This move seeks to remove the unfair tax advantages enjoyed by UK taxpayers who intentionally domicile themselves for tax purposes outside of the UK.
What does this mean for non-doms?
The key aim of this new policy is to ensure that entrepreneurs, high-net-worth individuals and investors that base themselves in the UK pay the right amount of tax on their earnings, whether these are UK-based or generated in overseas territories.
This is a major policy change and will mean that:
The outdated concept of domicile status will be removed from the tax system. A new residence-based regime will be introduced which is internationally competitive and focused on attracting the best talent and investment to the UK. The 4-year foreign income and gains (FIG) regime announced by the previous government at the Spring Budget will be introduced. The advantages for existing non-doms that remained in the proposed FIG regime will be ended to make the system fairer and to generate greater tax revenues for HMRC.
Talk to us about reviewing your non-dom status
If you’re currently non-UK domiciled for tax, these proposed changes may have a significant impact on your tax planning and ongoing tax costs as a UK resident and taxpayer.
We’ll keep you up to date with amendments to the non-dom system and can help you plan your UK tax to ensure you’re adhering to the new legislation.
