Bringing us her up to date views on what Starmer & Co.’s plans might be for UK non-doms, Jemma Hotta, Partner at Oury Clark, says:
“Whilst we are waiting to find out the precise detail of Labour’s non-dom proposals, prior to the election they did suggest that their plans were largely in line with the new non-dom proposals set out by the Conservatives.
However, they did announce that they would close a couple of perceived loopholes in the Conservatives’ plans, these being: Removal of a transitional concession under which only 50% of foreign income would be taxed during the first year of the new regime for those non-doms who have already lived in the UK for more than 4 years; and preventing non-doms from sheltering their offshore assets from UK IHT by transferring them to an excluded property trust before the start of the new regime.
It is envisaged that the new rules will involve charging UK IHT on worldwide assets when a person has been resident in the UK for 10 years, with a provision to keep a person in scope for 10 years after leaving the UK.
We therefore do not envision a mass exodus of non-doms from the UK immediately. However, wealthy non-doms for whom inheritance tax at 40% on their global assets is a genuine concern, might look to leave the UK once they approach the 10-year UK residence period. This is likely to be the case if they are unable to shelter their offshore assets in an excluded property trust (as Labour has suggested).
Interestingly, there have been some suggestions that Labour might provide additional concessions beyond those proposed by the Conservatives in order to incentivise investment by non-doms in the UK. We wait to see whether this will be the case.”
