The I quotes Miranda Fisher on the family law issues facing non-doms who are considering leaving the UK following the abolition of the non-dom regime announced in the UK Budget
It was announced in the Budget that Rachel Reeves will abolish the ‘non-dom’ tax regime and remove the “outdated concept” of domicile from the tax system from April 2025.
The non-dom scheme applies to UK residents whose permanent home is outside of the country for tax purposes and means they don’t pay UK tax on money they earn elsewhere in the world.
In response to the announcement, many advisors have warned that the abolition of the system could negatively impact the UK, Miranda Fisher, Family Partner, says that it could lead to:
a loss of the highest proportion of millionaires in the world over the next few years
According to a recent report by the Adam Smith Institute, the share of the British population who are millionaires is expected to decline by 20% by 2028 with serious implications for the economy. This is attributed to factors including increased taxation, tax hikes and the abolition of the non-dom regime under Labour.
Many non-doms are considering a move in response to the announcements and Miranda shares the family law consequences:
Whilst Italy, Switzerland and Dubai are reportedly among the destinations of choice for those considering a move from the UK, the family law consequences for relocating can be complex, particularly around divorce and child arrangements.
"If one spouse is considering divorce, the timing of their move could affect where the divorce proceedings can be initiated. Moving abroad could potentially limit the ability to file for divorce in England, which might be strategically important if England is seen as a more favourable jurisdiction.
"The English courts are known for their discretionary powers in dividing marital assets and for a starting point of equality of division of all assets accumulated during a marriage. Once jurisdiction for divorce in England is lost, the financial settlement on divorce could be subject to the laws of another jurisdiction, which might be significantly less generous to the weaker financial party.
"Moving from England can raise important issues of living arrangements for children, including choice of school and potential international child abduction. In some cases, where one parent wants to relocate the children abroad and the other parent refuses to agree, we could see applications made to the Family Court for permission to remove the children permanently from England to another country, subject to the children’s best interests.
Read the full piece in the I here.
Related coverage
City AM Letters (print only), International Adviser
