Changes to the non-dom regime: Labour’s response

The Labour Party has responded to the measures announced in the Spring Budget around abolishing the current ‘non-dom’ regime.

They have suggested they will keep the broad package of measures but with the following modifications.

New Arrivers

  • UK investment income will be exempt in the first 4 years, to encourage investment in the UK.

Existing UK Residents/Non-Doms

  • There will not be a 50% discount for foreign income in 2025/26.
  • The temporary repatriation facility may be extended beyond the proposed 2-year period but it is not clear whether the 12% tax rate will remain fixed beyond two years.

Trusts

  • Excluded property trust status will be lost, bringing any trusts created before 6 April 2025 within the full scope of UK Inheritance Tax from 6 April 2025.

Whilst there is a significant amount of detail missing at the moment, at least we now have some indication as to what the Labour Party are proposing to do.

However, the suggestion to scrap excluded property trusts will be the most problematic aspect of Labour’s announcements and probably the most unwelcome news to many.

How can we help?

Given the ongoing uncertainty around the general election and what changes will be introduced, there is still the opportunity to plan ahead before April 2025.

If you would like to discuss the potential impact of these changes on your personal tax position, please contact us.

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