Sunir Watts comments on Labour’s proposed changes to non-dom status in Tatler
Sunir’s comments were published in Tatler, 26 July 2024, and can be seen here.
Sunir Watts, Partner in our Private Client department, discusses the potential end of the UK’s non-domiciled (non-dom) tax status under the incoming Labour government.
Recent HMRC data shows an 18% rise in newly arrived non-doms in 2022, but this trend may reverse as Labour signals sweeping reforms. These changes have sparked concern among internationally mobile ultra-high-net-worth individuals (UHNWIs), many of whom rely on non-dom status for favourable tax treatment. The looming reforms raise urgent questions about whether a mass exodus of wealth and talent could follow and what steps current non-doms should take to prepare.
The non-dom regime has long allowed individuals to live in the UK while limiting their tax liability on overseas income. However, Labour’s proposed overhaul could significantly reduce or eliminate these benefits, prompting affected individuals to reassess their residency and financial planning strategies. For many, this may involve exploring alternative jurisdictions, restructuring assets, or accelerating plans to leave the UK altogether. The uncertainty is driving a surge in demand for specialist legal and tax advice.
While the full details of Labour’s reforms are yet to be finalised, the direction of travel is clear: the UK is moving toward a more globally aligned tax system that prioritises transparency and fairness. For non-doms, this means acting swiftly to understand the implications and mitigate potential risks. Strategic planning, including domicile reviews and succession planning, will be essential in navigating this shifting landscape.
Read the full article on Tatler website [external link].