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The Labour government has announced plans to modify controversial tax changes for non-domiciled residents following an unprecedented departure of wealthy individuals from British shores. Chancellor Rachel Reeves revealed the forthcoming amendments at the World Economic Forum in Davos, responding to mounting pressure from the financial community.
Data indicates that Britain experienced a net loss of 10,800 millionaires through migration in 2024, marking a staggering 157% increase from the previous year. The exodus has positioned the UK as the second-highest loser of wealthy residents globally, surpassed only by China.
The proposed modifications centre on expanding the temporary repatriation facility, enabling non-doms to transfer funds to the UK with reduced tax implications. The changes aim to broaden qualification criteria and address concerns regarding double-taxation agreements, particularly with nations like India.
Tax experts remain sceptical about the effectiveness of these amendments. Rachel de Souza from RSM UK characterises the changes as “woefully inadequate” to prevent the ongoing departure of wealthy individuals. The modifications arrive against the backdrop of the Office for Budget Responsibility’s prediction that Labour’s non-dom regime changes would generate £33 billion for the exchequer.
Industry specialists suggest the government’s response may be too late to reverse the trend. Stephen Kenny, head of private client at PKF Littlejohn, emphasises that confidence in the UK’s tax stability has been severely undermined, making it challenging to retain internationally mobile wealth.
The property sector has already witnessed significant impact, with prime London real estate experiencing reduced interest from high-net-worth buyers. Jeremy Hunt, former Conservative chancellor, criticised the Labour administration’s approach, arguing that ideology has superseded economic pragmatism in policy formation
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