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Chancellor Rachel Reeves has revealed that plans to abolish non-dom status will be amended to allow a more gradual phase out of tax benefits. Speaking at the World Economic Forum in Davos, Reeves announced that upcoming legislation aimed to increase the generosity of an offer to help non-doms repatriate their funds to the UK.
Non-dom status currently enables people who reside in the UK to avoid paying UK tax on money made abroad if their permanent home for tax purposes is outside the UK. In the Labour Party’s election manifesto, it pledged to scrap the status, arguing that this would address tax system unfairness and raise revenue for public services.
Critics have pointed out that the changes could cause wealthy people to leave the country. A report from New World Wealth and investment advisors Henley & Partners, published last week, showed that over 10,000 millionaires left the UK in 2024, a 157% increase on the previous year. Reasons cited included the effect of increased taxes on non-doms and other wealthy individuals, the growing dominance of the US and Asia in the tech sector and the declining relevance of the London Stock Exchange.
The modifications to the Temporary Repatriation Facility, a three-year scheme designed to encourage ex non-doms to bring their assets to the UK at a discounted tax rate, were described as a minor adjustment unlikely to significantly affect the revenue raised by the overall policy. The changes will be made to the Finance Bill and do not alter the government’s overriding goal of replacing the outdated non-dom tax system.
The adjustments are not expected to impact the £33.8bn the policy is expected to raise over the next five years. According to the Treasury, the repatriation scheme is intended to encourage non-doms to invest and spend in the UK
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