Press Room

1 Mar 2024

Jeremy Hunt considers scrapping UK ‘non-dom’ tax status

Partner and Head of International Tax, Miles Dean, explains why scrapping the UK’s non-domiciled tax status would be shortsighted and economically detrimental, in The Independent.

Miles’ letter was published in The Independent, 1 March 2024.

The Conservatives must be a busted flush if they’re seriously considering scrapping the non-dom regime, particularly if this is simply to fund tax cuts elsewhere.

This announcement comes in a time of desperation for the Conservatives, who are targeting low-hanging fruit in a futile bid to salvage their electoral prospects. Despite the grandstanding, the fact remains that the non-dom regime is a generally beneficial provision that attracts wealthy foreigners to the UK.

The non-dom regime does need reform, and the remittance basis rules are complicated and inefficient, to say the least. They obviously incentivise keeping money out of the UK economy. However, this doesn’t appear to be why Hunt is considering this move.

While the Conservatives have to try to appeal to the red wall, this should not be how they do it. They also likely do not know how much this would actually raise and whether it would be worth the potentially huge downside as non-doms flee or opt not to relocate to the UK in the first place.

There is an important discussion to be had about who the UK should be trying to attract, and how best to go about that, but short-sighted policy fuelled by electoral desperation is no solution.

Whether they have announced this merely to gauge sentiment or it’s actually a reality is much the same thing – the Conservatives are dead and buried, both politically and economically. We will now usher in a Labour Party who are almost indistinguishable.

Miles Dean

Miles is Head of International Tax at Andersen LLP. He advises privately held multinational companies, entrepreneurs and high net worth individuals on a wide range of cross border tax issues.

Email: Miles Dean