The Independent quotes Dominic Lawrance on the ‘watering down’ of Labour’s non-dom tax reforms
It has been reported that Rachel Reeves intends to table an amendment to the Finance Bill 2025, which will implement the proposed reforms to the taxation of “non-doms”. The amendment is apparently intended to expand, in some way, the “temporary repatriation relief” or TRF.
The TRF is a relief targeted at UK resident individuals who have previously used the remittance basis, i.e. UK resident foreign domiciliaries, which will enable them to bring funds into the UK at a lower tax cost than would otherwise apply.
No details have been given on the nature of the expansion of the TRF. Although a reduction in the applicable tax rate is conceivable, much more likely is that the Government will be extending the period in which the TRF can be used. Under the existing draft legislation, use of the TRF will be limited to a three year window running from 6 April 2025.
Dominic Lawrance, Private Client Partner, comments:
Rachel Reeves has stated that she is listening to concerns about the widely reported “millionaire exodus” of “non-doms”. But If the Government’s only proposed solution is making minor changes to the TRF, it seems the Treasury is still failing to understand the issues which are driving this economically catastrophic development.
"The TRF is only relevant to former remittance basis users who have reconciled themselves to remaining in the UK for at least one further tax year. Amending the TRF, for example by extending the period in which the TRF will be usable, won’t change the hearts and minds of the many foreign domiciled individuals who now feel unwelcome in the UK, and are looking to move out. The fact remains that for many such individuals, if they remain UK resident, the future taxation of their income, gains and wealth will be unattractively high, compared to alternative regimes available in other countries. The TRF will do nothing to mitigate this.
"If the exodus is to stopped, far more radical change is needed, in the form of a special tax regime for internationally mobile individuals, which is genuinely attractive and competitive. The Government needs to show that it gets this point. The latest announcement looks very much like a rearrangement of deck chairs on a stricken liner.
Read the full piece in The Independent here.
