The government will abolish the current non-dom tax system and replace it with a “simpler and fairer residency-based system”, announced chancellor Jeremy Hunt in today’s Spring Budget.
“From April 2025, new arrivals to the UK will not be required to pay any tax on foreign income and gains for their first four years of UK residency, which is a more generous regime than at present and one of the most attractive offers in Europe,” Hunt said.
“But after four years, those who continue to live in the UK will pay the same tax as other UK residents.”
The change to non-dom tax affects people who are resident in the UK but not domiciled here for tax purposes.
Hunt said the government wanted to recognise the contributions that many of these individuals make to the UK economy, so he has put in place transitional arrangements for those benefiting from the current regime.
These transitional arrangements will include a two-year period in which individuals will be encouraged to bring wealth earned overseas to the UK where it can be spent and invested. This is “a measure that will attract onshore an additional £15 billion of foreign income and generate more than £1 billion of extra tax”, Hunt said.
“Overall, abolishing non-dom status will raise £2.7 billion a year by the end of the forecast period. We will use that revenue to help cut taxes on working families.”
