No cheers for Labour government from non-doms
Non-doms hoping the new Labour government would change or delay their reforms to the regime will be disappointed by yesterday’s HM Treasury policy paper, say leading audit, tax and business advisory firm, Blick Rothenberg.
Nimesh Shah, CEO of the firm, said: “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.”
He 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.”
Nimesh said: “The policy paper curtails some of the original transitional provisions for the move to the FIG regime – including removing the first-year discount on foreign income, intimating an increase to the tax rate for the temporary repatriation facility and confirming that it will remove the inheritance tax exemption for trusts. There is a clear signal that this Labour government wants an end to the non-dom regime.”
He added: “Many non-doms have been critical of the proposals and it has been widely reported that non-doms are considering leaving the UK to take residency in Italy, the UAE, Switzerland and similar jurisdictions offering tax breaks. The confirmation that the Labour government is pressing ahead with its plans is likely to reiterate, and in some cases, accelerate plans to exit the UK.”
Nimesh said: “In some ways, it is helpful that the new government have clarified their position and a line has been drawn. Although the final detail of the rules will not be known until 30 October 2024, the date of the Autumn Budget, we shouldn’t expect any reverses given the clear tone in the policy document.”
