A major change to tax rules has been introduced, which is likely to impact thousands of people across the UK.
The Government has abolished the non-dom tax status, effective April 2025, meaning people with a primary residence abroad will be liable for tax in the UK.
The current system will give way to one based on tax residence. Until this year, a non-UK domiciled individual was someone resident overseas for tax purposes and who only paid UK tax on money earned in the UK. For the wealthy, this provided an opportunity to save substantial amounts when choosing a lower tax regime as their domicile.
The changes will also increase the ‘temporary repatriation facility’, an initiative that enables people living non-domestically to bring cash into the UK without incurring a hefty tax bill. There will also be a new foreign income and gains regime for anyone who has recently arrived in the country and who has not been a UK tax resident in the previous decade. Moreover, there will be reform of Overseas Workday Relief.
The Government’s aim is to ensure all long-term residents pay their tax in the UK, with a new residence-based system to woo talent and investment to the country. According to the Treasury, the non-dom reforms are expected to raise the £33.8 billion of tax revenue calculated by the Office for Budget Responsibility (OBR).
If you are tax planning in Cheshire but domiciled overseas and unsure as to how you will be affected by the new regime, get in touch with our specialist team at Hartey Wealth Management today to set up a meeting.
