Non-Doms Election Uncertainty: What Will The 4th July Hold?

Our previous articles connected to the Conservative Government’s 2024 Spring budget, outlined the proposed changes for Non-Doms and new residents in the UK. These articles highlighted existing questions around the timing of implementation and in particular the lack of clarity related to Inheritance Tax changes.

The 4^th July election announcement has unfortunately led to even more uncertainty for UK residents and non-domiciled individuals.

Given both major parties are committed to amending the tax position for Non-Doms,  we are fairly certain that the tax landscape for Non-Doms will still change. The exact tax policy and timing is now, however, even more unclear.

What is the Non-Doms Position Currently?

The position so far, is as follows:

• Draft legislation associated with Conservative Spring budget announcements was expected during the summer. Parliament is now dissolved, meaning no legislative progress will be announced before the election has taken place. HMRC have also halted consultation sessions with the tax profession.
• Inheritance tax changes, which were to be subject to consultation with stakeholders before any draft legislation, have now been paused. As consultations have not yet been started, it is unlikely that any draft legislation could be presented until very late this year, at the earliest.

Both Conservative and Labour policies rely on spending plans associated with expected tax generated by the abolishment of non-dom tax regime and so it’s likely a question of when, not if, any draft legislation is going to be presented to parliament. Knowing both major parties need this tax revenue, It’s possible that civil servants are still working on proposed legislation behind the scenes, which means it is perhaps unwise to assume that non dom reform will be significantly delayed.

Key to mitigating future UK tax exposure, will be the ability to act quickly once legislation is clear and so we still recommend that affected individuals start planning early for the changes which may come, setting out potential plans and realistic options now. This will in turn,  allow for a swift and agile response once the political and legislative landscape is clear.

The Private Client International Tax Team are perfectly placed to provide the specialist tax advice needed. Please get in touch with your usual AAB contact or alternatively contact Lynn Gracie or Gunhild Dam. 

We will continue to monitor party communications in the coming weeks. Follow our LinkedIn page for up-to-date commentary on all things fiscal in the run up to the Election.