The 2024 Autumn Budget: The baton for non dom changes is taken up by the Labour Government

The new Labour Government has announced that the Autumn Budget will take place on 30 October 2024. 

International families with UK connections (and their advisors) know that big changes are coming for the taxation of so-called “non-doms” and UK inheritance tax (IHT). 

The policy paper (linked below) says the Government is “committed to addressing unfairness” within the tax system but, on the other hand, commits to creating an “internationally competitive” regime “attracting the best talent and investment to the UK”. It remains to be seen how these two objectives will coexist.

More detailed comments on the recent announcement are available here, but the key points include: 

• the new Government has confirmed that they will implement the special four-year regime originally proposed by the previous Conservative Government earlier this year;
• this means arrivers to the UK will not be taxed on their non-UK income and gains for their first 4 years of UK residence (provided they were not UK resident in any of the previous 10 years);
• the new 4-year regime will be introduced from 6 April 2025;
• a transitional relief will reduce the tax for current and previous remittance basis users, to make it more attractive for them to bring previously unremitted income and gains to the UK (though the tax rate and for how long this relief will be available have not been confirmed yet);
• exposure to UK inheritance tax on worldwide assets will occur following 10 years of UK residence and there will be a 10-year tail, meaning that you will have to be non-UK resident for 10 years for your non-UK assets to be outside the scope of IHT; and
• the Government intends to change the way IHT is charged on non-UK assets which are held in trust.  How this will be achieved is not yet clear.

Details of how the new measures will be implemented are eagerly awaited – we will know more once the Budget takes place on 30 October.