Rachel Reeves has announced her intention to soften the proposed tax regime on non-doms after taking into account their concerns. Downing Street has responded, stating that this adjustment does not "change the overall approach" to the Government’s policy. The Tories said it shows that Labour’s Budget is "falling apart in front of our eyes". Following feedback from the non-dom community, the Chancellor plans to introduce an amendment to the taxation plans for non-domiciled residents.
This amendment will expand the temporary repatriation facility, which permits non-doms to bring funds into the UK without incurring significanttaxes. This move comes amid reports from analysts suggesting that the increased taxes were driving millionaires away.
In a conversation at the World Economic Forum in Davos with the Wall Street Journal, the Chancellor explained that the tax hike on non-doms was initially aimed at generating revenue for public services. "But we have been listening to the concerns that have been raised by the non-dom community," Ms Reeves acknowledged.
"And in the finance bill, we will be tabling an amendment which makes more generous the temporary repatriation facility, which enables non-doms to bring money into the UK without paying significant taxes.". The Treasury maintains that the non-dom reforms will still secure the £33.8bn in tax revenue projected by the OBR, including the new amendment. Additionally, Ms Reeves mentioned she had heard worries from nations with double taxation agreements with the UK, like India, about the potential impact on inheritance tax obligations.
