If you are tax planning in Cheshire, there has been much media speculation about the rumoured flight of non-doms (‘non-domiciled’ residents) overseas. But does the evidence support this?
The truth is hard data has been hard to come by. Some reports suggest the wealthy have been leaving the UK in droves, while others suggest it may be exaggerated. The old regime was certainly very old, having existed since 1799, enabling people to avoid taxation on overseas assets and income. The Government modified the rules to ensure foreign income and gains were liable for UK tax. There were an estimated 74,000 non-doms in April when the regime ended.
The Office for Budget Responsibility calculated that the new regime could result in a 12% to 25% decline in those without trusts. HMRC figures show this group paid just under £9 billion in tax in 2023. It is true that some high-profile members of the wealthy elite have left, as evidenced by the luxury townhouses on sale in Central London. The fact some are discounted would point to a lack of interest from prospective buyers. But is that necessarily an indication of nervousness around inheritance tax?
While the new inheritance tax regime has prompted some departures, others are staying put through a sense of patriotism or attachment to London – a world-class city offering the best in food, education, the arts or rule of law. Only time will tell if there has been an exodus, with HMRC suggesting it could be January 2027 before self-assessment tax returns provide the first official data.
