How Do The Non-Dom Reforms Affect Me?

At present, the exact nature and timing of any non-dom reforms are not known and so their impact is impossible to assess. The only certainty at this stage would appear to be that the system of taxation for non-doms will change with the biggest impact likely to be felt by those who are already UK resident.

The non dom reforms

In the March 2024 Budget it was announced that the current remittance basis of taxation would be abolished with effect from 6 April 2025. The proposed new regime was to be based on an individual’s residence status, rather than their domicile.

This change was subject to various transitional provisions which, in some cases, would lessen the immediate impact of the abolition of the remittance basis. Notwithstanding, the overall effect was to accelerate the point at which someone coming to the UK became liable to UK tax on their world-wide income and gains. There were similar proposals to extend the scope of Inheritance Tax to non-UK assets, possibly including those held by non-UK trusts.

It is expected that these proposals will be revived by the new government following the General Election in July 2024.

It is too early to make any informed decisions as to what actions may be appropriate but any who may be affected should nonetheless be starting a conversation as to possible options, particularly those who may be considering leaving the UK. Please get in touch if these issues are likely to affect you.