The new Labour Government’s plan to offer non-doms an easy exit route out of the UK in the next tax year has raised concerns among experts. Nimesh Shah, CEO of leading audit, tax, and business advisory firm Blick Rothenberg, pointed out a transitional rule buried in the technical details of the non-dom changes. This rule allows non-doms to leave the UK without being affected by the new ’10-year tail’ for inheritance tax. Shah expressed that this move feels like Chancellor Rachel Reeves is handing out first-class plane tickets to non-doms looking to exit the country quickly.
Non-doms were already worried about the 40% inheritance tax impact in the original proposals, prompting some to consider leaving the UK. With a steady exodus of non-doms already underway, the recent reforms announced in the Autumn Budget are expected to accelerate relocation plans. Shah highlighted that the government’s projected revenue of £12.7 billion from these changes may be at risk if non-doms decide to leave, questioning where the government will find the necessary funds.
The CEO emphasized that achieving the £12.7 billion target was ambitious from the start, and with additional changes to capital gains tax, inheritance tax reliefs, and carried interest rules, the government’s task becomes even more challenging. The concerns raised by experts suggest that the government needs to carefully reconsider its approach to non-dom taxation to prevent a significant revenue shortfall.
In light of these developments, it is crucial for policymakers to assess the potential implications of the non-dom changes on the UK’s tax revenue and overall economic landscape. Finding a balance between attracting foreign investment and ensuring a fair tax system will be essential to maintain the country’s competitiveness on the global stage. As the situation continues to evolve, stakeholders will closely monitor how non-doms respond to the new regulations and adjust their strategies accordingly.
