Once in a lifetime opportunity for Government to create a world class non-dom regime

Government must step back and delay new regime

With just over 4 weeks to go until the Autumn Budget, the Government has a once in a lifetime opportunity to create a world class non-dom regime

Nimesh Shah, Blick Rothenberg CEO says:

The Chancellor, Rachel Reeves and the Government have a once in a lifetime opportunity to create a world class non-dom regime for investment and talent attraction. To do this they need to take a step back and develop a strategy which links foreign investment, immigration and tax policy.

Firstly, they should delay introducing the new regime until at least 6 April 2026, and conduct a proper consultation on the reforms. This is a major reform and the lack of proper consultation and rushed legislation is deeply concerning. The present 4-year tax relief proposal is simply too short, and a 10-year regime with an annual flat fee of say, £100,000 per annum, would be very attractive.

The cliff edge for inheritance tax is the most concerning aspect of the proposed changes, a grandfathering of existing trusts and a longer transitional period for inheritance tax would go some way to cushion the impact, and encourage non-doms to remain in the UK.

Currently the subsequent tightening of the proposed reforms by the Government have sparked more concern among the non-dom community, with increased numbers planning to exit the UK, and a further backdrop of generally higher taxes. The many stories of an exodus of non-doms from the UK has forced the Office of Budget Responsibility (OBR) to re-think its forecasts on how much tax revenue the Government’s non-dom reforms will raise, and damage to the UK’s economy.

The OBR had always maintained that their original estimate of an extra £2.7bn of tax revenue by abolishing the non-dom regime was highly uncertain. With such a significant majority and a mandate for long-term change, the Government must slow down and ‘talk up’ the prospects of the UK as a world class destination for investment by delaying and reconsidering their proposed non-dom reforms.