Article
Withers report: The UK's non-dom regime - time to reform rather than replace?
23 April 2024 | Applicable law: England and Wales | 2 minutes
Here are just five of the key findings and views from our interviewees. To see the full list, please read our report.
- Economic and cultural contributions of non-doms are significant, from creating employment, making major tax contributions, to philanthropy across a plethora of causes.
- If there wasn't a sympathetic tax regime other factors such as culture and education would become less influential.
- The regime is overly complex and confusing, and needs updating.
- The current system enables people who are driven by tax avoidance to abuse the rules.
- The UK is no longer attracting as many non-doms, more are going to Italy than coming to the UK.
Should the UK's non-domiciled tax regime be entirely scrapped? Should further changes be made, continuing the adjustments made over the last 15 years? Or is it time to look at making bold reforms to become more competitive with other tax regimes around the world?
It is clear that, given the UK's political environment and heated debate about the non-dom regime, some degree of change is inevitable.
With this in mind, we prepared our report by speaking to non-doms and the advisors who work with them to understand the practical aspects of whether the regime functions for them and where it fails to do so. We look at the media's portrayal of non-doms and what other countries are doing better. We've also looked at how non-doms make contributions to the country at large, both economically and socially and what impact scrapping the regime would have.
We hope that our research report will help to shape debate and drive a more constructive conversation about non-doms and the rules they are bound to.
Click here to read the report in full
Our recommendations for change
Our research led us to the conclusion that a bold approach needs to be taken to reform the existing regime and we suggest the following changes to create a more productive and popular tax regime:
Who qualifies?
Linking the regime to domicile is out-moded. A new regime should be open to any individual who has not lived in the UK for the last 10 years.A higher flat fee
A flat annual fee that is competitive in comparison with other international regimes offers a welcome move away from the regime's current complexity.Use the system to encourage investment in the UK
Any non-dom system should incentivise and promote investment and remove any obstacles for bringing money into the UK to invest in businesses.The visa system
A new regime could be aligned with the UK's investor visa policy, so as to attract talented and entrepreneurial individuals.Time limits
There comes a point where a non-dom becomes simply another taxpayer. 15 years represents an appropriate limit, providing a clear end point for those who choose to remain longer term.Transitional arrangements
The mass flight of existing non-doms could be avoided by offering them the opportunity to transfer gradually into a new regime.Get in touch
Related experience
As a full-service law firm, we are able to provide advice and information about a wide range of other issues. Here are some related areas.
