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The quantity of people that claimed non-dom standing within the UK has risen barely for the reason that Covid pandemic.
Some 74,000 folks claimed non-dom standing in 2022-23, up from 68,900 in 2021-22, HM Income & Customs knowledge confirmed.
The brand new Labour authorities has pledged to scrap the non-dom tax standing to lift extra money for the NHS and different public providers.
What’s a non-dom?
“Non-dom” describes a UK resident whose everlasting house – or domicile – for tax functions is exterior the UK.
It refers to an individual’s tax standing, and has nothing to do with their nationality, citizenship or resident standing – though it may be affected by these elements.
A non-dom solely pays UK tax on the cash they earn within the UK. They don’t have to pay tax to the UK authorities on cash made elsewhere on the earth (except they pay that cash right into a UK checking account).
For rich people, this presents the chance for important – and completely authorized – financial savings, in the event that they select a lower-tax nation as their domicile.
Probably the most well-known non-doms is former prime minister Rishi Sunak’s spouse, Akshata Murty.
How are the non-dom guidelines altering?
Labour revealed plans to scrap the non-dom regime in April 2022.
Underneath Mr Hunt’s plans, individuals who moved to the UK from April 2025 wouldn’t need to pay tax on cash they earned abroad for the primary 4 years.
After that interval, in the event that they continued to reside within the UK, they might pay the identical tax as everybody else.
These individuals who at present have nom-dom standing could be allowed a two-year transition interval, throughout which they might be inspired to carry their international wealth into the UK system.
The previous chancellor stated eliminating the non-dom standing would elevate £2.7bn a yr by 2028/29.
It stated it will take away a 50% low cost within the first yr of the brand new guidelines and embrace international property held in a belief inside the UK inheritance tax framework.
The brand new Chancellor Rachel Reeves stated Labour’s adjustments might elevate £2.6bn over the course of the subsequent Parliament.
How do you grow to be a non-dom?
You possibly can grow to be a non-dom in two foremost methods:
- Domicile of origin – in the event you have been born in a unique nation from the UK, or in case your father got here from a unique nation
- Domicile of alternative – in case you are over 16 and select to go away the UK and reside indefinitely out of the country
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What are the present guidelines for non-dom standing?
In case you are a non-dom and also you select to not pay tax within the UK in your abroad earnings, you need to pay:
- £30,000 in the event you’ve been right here for at the very least seven of the earlier 9 tax years
- £60,000 for at the very least 12 of the earlier 14 tax years
In 2017, the non-dom guidelines have been modified to imply you possibly can now not declare this standing in case you have been a UK resident for 15 out of the earlier 20 years, or if all the next circumstances apply:
- you have been born within the UK
- your domicile of origin was within the UK
- you have been resident within the UK for at the very least a yr since 2017
Nonetheless, in the event you earn lower than £2,000 a yr from international earnings, and you don’t carry that cash into the UK, you should not have to do something.
What number of non-doms are there?
That was a rise from 68,900 in 2021-22, which HMRC stated was a restoration in numbers of non-domiciled taxpayers for the reason that Covid-19 pandemic.
- greater than 93% have been born overseas, and one other 4% had lived overseas for a considerable interval
- three in 10 individuals who earned £5m or extra claimed non-dom standing, in contrast with fewer than three in 1,000 amongst these incomes lower than £100,000
- most non-doms got here from Western Europe, India and the US, though there had been a speedy rise since 2001 of non-doms from China and former Soviet states
- most lived in and round London – and a couple of in 10 adults in Kensington, the Metropolis of London and Westminster have been, or had been non-dom
