Uncertainty Surrounds Non-Dom Reforms in Latest Finance Act

In the run-up to the early general election, the government expedited the passage of the Finance Bill, incorporating measures from the 2024 Spring Budget. However, a significant reform was absent. What has happened?

The 2024 Spring Budget announced an overhaul of the rules for “non-domiciled” individuals, set to take effect in 2025. This reform was to introduce a residence-based test, allowing a brief period of tax-free overseas income and gains for those moving to the UK. A detailed technical note soon followed, outlining the new rules. Yet, with the sudden call for a general election on 4 July, these plans seem to have been shelved. The Finance (No. 2) Act 2024, which received Royal Assent on 25 May 2024, contains no clauses regarding these reforms. So, what does this mean for non-domiciled individuals seeking clarity on their tax status?

Regardless of which party wins the upcoming election, some level of reform is expected. Unfortunately, this is the only certainty at the moment. Labour has long advocated for the abolition of non-domiciled status and criticised the Spring Budget’s proposals for perceived loopholes. Thus, it’s unlikely that the reforms will be entirely abandoned. We hope that detailed proposals will emerge in the lead-up to 4 July and we will post updates accordingly.

For further information, please see the linked resources below.

Non-dom reforms cut from pre-election finance bill | AccountingWEB