Skip to content
Home Link Logo

Tax rates for Americans may go up because of the UK general election and the American election in November

Americans lose their Non-Dom status

The tax rate for Americans living and working in the UK may go up because of the UK’s general election and America’s election in November.

Alex Straight, Partner said:

For Americans, this is the warm up ahead of the main event of the US election in November.

With a historic landslide, Labour have been given a mandate to deliver a long-term tax strategy. The Labour manifesto promises to keep income tax, national insurance, VAT and corporation taxes unchanged. Whilst stability is welcomed, the non-dom tax changes which were previously announced by the previous Conservative Government and will be retained by Labour, will affect many Americans in the UK, as the non-dom tax regime historically meant that many Americans living in the UK could avoid a tax liability (at high UK tax rates), on their non-UK source income and gains and this will typically not be the case on a going forward basis.

There also has not been any commitment from Labour about capital gains taxes. Currently the UK main tax rate on capital gains is comparable to the US, but any increase to the main rate or changes for carried interest will push up the global effective tax rate for Americans in the UK.

Without any major headline tax increases, it is growth that is needed to balance the books. With a healthy majority, we hope this is part of any proposed tax policy. The UK has always been a popular destination for Americans to live and work. Whilst we have a large majority government, the same may be unlikely in the US in November. In a year of elections and change, the first part of the puzzle is falling into place, and we should know more by the first UK Budget, expected in September. The US election is going to be much closer with more uncertainty on the future US tax landscape and how this will affect Americans in the UK.

Would you like to know more?

If you would like to discuss the above or how it may affect you, please get in touch with your usual Blick Rothenberg contact or Alex Straight, using the form below.

Contact Alex

Alex Straight
Alex Straight
View Alex's profile