Plans to abolish non-dom status will be changed to allow a more generous phase-out of tax benefits, Chancellor Rachel Reeves has announced.
Reeves told an audience at the World Economic Forum in Davos that changes would be made to upcoming legislation to increase the generosity of a mechanism to help non-residents repatriate their funds to the UK.
Non-dom status allows people who live in the UK to avoid paying UK tax on money earned abroad because their permanent domicile for tax purposes is outside the country.
Labor has pledged to remove the status in its election manifesto, saying it would address the unfairness of the tax system and raise additional funds for public services.
However, critics have raised concerns that the changes could prompt wealthy people to leave the UK.
Reeves said at a Wall Street Journal event, “We have listened to the concerns raised by the non-dom community.”
The scale of the change to the Temporary Repatriation Scheme, a three-year scheme to help former non-residents import their assets into the UK at a 12% tax rate, has been described as an “adjustment » which is not expected to change significantly. the money raised thanks to the global policy.
Downing Street said the adjustments, which will be made through amendments to the Finance Bill, did not change the government’s overall approach “to replacing the outdated non-dom tax regime”.
The Prime Minister’s official spokesperson said the new system “tackles the unfairness of our tax system, attracts the best talent and investment to the UK and ensures that everyone with long-term residence in the UK Uni pay their taxes here.”
The chancellor chose to announce the easing in Davos as part of a multi-pronged effort to demonstrate her willingness to change policy to support economic growth.
On Wednesday, she also introduced visa changes to allow top talent in artificial intelligence (AI) and drug research to come to the UK.
Some industry players believe there is an opportunity for the UK to recruit top scientific and pharmaceutical talent from the US under the new administration, as well as the European Union in the field of AI.
