In response to the government’s potential U-turn on the non-dom regime, Paul Fairbairn, partner at Cripps, said:
“It’s not too late to turn the tide against the mass exodus of wealthy international residents from the UK – many of whom wish to continue their lives here.
“For those who have left, the final straw has almost always been inheritance tax — not taxation on global income or capital gains. If the rumours are accurate, what is being considered are not wholesale changes, but targeted tweaks to the legislation. It would be relatively straightforward to reinstate some or all of the inheritance tax protections previously available through so called ‘excluded property trusts’. Another tweak that could at least encourage some to remain in the UK longer—if not indefinitely—would be to reduce the current ten-year inheritance tax tail that applies after a long-term resident leaves the UK.
“The new tax regime for long-term residents is not the only deterrent facing those weighing whether they — or more importantly, their businesses — stay or go. Proposed changes to business relief from inheritance tax, for which no legislation has yet been introduced, are another area of concern. These draft proposals should be easier to revise, and meaningful adjustments could be enough to reassure some international entrepreneurs and investors that their potential exposure to UK inheritance tax remains manageable.”
