Chancellor Rachel Reeves is facing pressure from lobbyists representing the UK’s 74,000 non-domiciled residents (non-doms) to scale back her planned tax changes, ahead of her upcoming budget.
The newly formed group, Foreign Investors for Britain, is set to meet with government officials this week to urge a reconsideration of Reeves’s proposed overhaul of the non-dom tax regime, which could include levying inheritance tax on foreign assets.
Non-doms, who are UK residents but are considered domiciled overseas for tax purposes, are currently exempt from paying UK taxes on their overseas income. However, Reeves’s proposed changes have sparked fears that wealthy non-doms will leave the UK, potentially causing a net loss in tax revenues rather than boosting the Exchequer. In 2022-23, non-doms contributed £8.9 billion to UK tax revenues.
The lobby group, which formed in June and has already met with Treasury officials, is proposing an alternative tiered tax system. This would see non-doms paying a fixed annual sum, scaled to their wealth, for a period of 15 years. Under the plan, someone with up to £100 million in personal wealth would pay an annual charge of £200,000, with those worth more than £500 million contributing £2 million annually. Currently, non-doms pay up to £60,000 a year.
Leslie MacLeod-Miller, a spokesperson for Foreign Investors for Britain, said: “We’re pleased the government is listening because this is a real issue. Britain is turning into a departure lounge, and without changes, we risk losing valuable investment and tax revenue.”
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