Non-doms hoping for changes or delays to the new Labour Government’s reforms will be disappointed by the HM Treasury policy paper released yesterday, according to leading audit, tax, and business advisory firm Blick Rothenberg.
Nimesh Shah, CEO of Blick Rothenberg, stated: “Non-doms holding out for changes or a delay to the original Conservative Government proposals will be disappointed, as the reforms will be largely the same as announced by Jeremy Hunt in his last Spring Budget as Chancellor.”
Shah added: “The new Government has committed to implementing the 4-year Foreign Income and Gains (FIG) regime from 6 April 2025, and there is clear intent to progress that change as soon as possible.”
The policy paper has curtailed some of the original transitional provisions for the move to the FIG regime. This includes removing the first-year discount on foreign income, suggesting an increase to the tax rate for the temporary repatriation facility, and confirming the removal of the inheritance tax exemption for trusts. Shah indicated, “There is a clear signal that this Labour Government wants an end to the non-dom regime.”
Many non-doms have been critical of the proposals, with reports suggesting that they are considering relocating to countries like Italy, the UAE, and Switzerland, which offer tax breaks. The confirmation that the Labour Government is pressing ahead with its plans is likely to reinforce and, in some cases, accelerate plans to leave the UK.
Shah noted, “In some ways, it is helpful that the new Government has clarified their position and a line has been drawn. Although the final details of the rules will not be known until the Autumn Budget on 30 October 2024, we shouldn’t expect any reversals given the clear tone in the policy document.”
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Labour government presses ahead with non-dom tax reforms