The non-dom tax regime is rarely out of the headlines but today the Chancellor and his 70-page Autumn Statement was notably silent on any changes to the non-dom tax regime.
Earlier this year Labour announced that they would scrap the non-domiciled tax status in favour of a “temporary resident tax regime” and we did wonder whether today’s statement might include some tweaking to the current rules or, at the very least, an announcement of a consultation process to begin tweaking the rules. Instead, there was absolutely no mention of non-UK domiciliaries. This means the Chancellor has either decided not to make changes or that now is not the right time.
The last changes to the non-dom regime took place in 2017, which introduced the deemed UK domicile concept for individuals living in the UK for more than 15 years. Non-doms living here for less than 15 years are still able to shelter their foreign income and gains from UK tax as long as they keep the monies offshore. To access the remittance basis of taxation there is a £30,000 tax charge if you have been living here for at least seven of the previous nine tax years. This increases to £60,000 if you have been resident for at least 12 of the previous 14 years.
September 2022 research paper
According to a paper carried out by researchers from the University of Warwick and The London School of Economics bn38cover the 2017 changes led to just 0.2% of long-staying non-doms leaving the UK and those that did leave were paying very little in UK tax.
This paper is an interesting read and their findings have been based on “de-identified and confidential data” accessed via HMRC. Some of the headline points are:
- Non-doms have at least £10.9 billion in offshore income and gains which are neither reported to HMRC or taxed in the UK
- 55% of these unreported income and gains belong to non-doms who arrived in the UK in the past five years
- Abolishing the non-dom regime completely would raise £3.2billion. If they preserved non-dom status until the fifth year of residence it would raise £1.6 billion
What will the future bring?
We expect the silence to be temporary, and given the General Election is to be held no later than January 2025, we will wait to hear whether the Chancellor is going to act on any of the above findings in perhaps the 2023 or 2024 budget announcements.
In the meantime, if you are non-UK domiciled, and have any questions regarding the current rules and opportunities available to you then please get in touch with your usual contact.