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Will UK scrapping the non-dom status drive exodus of HNWs?

 

March 8, 2024 (Investorideas.com Newswire) The UK's abolition of the non-dom tax status from April 2025 is likely to fuel an exodus of high-net-worth individuals from the UK as they look to overseas destinations, affirms the CEO of one of the world's largest independent financial advisory and asset management organisations.

The prediction from Nigel Green of deVere Group, which has more than 80,000 expatriate clients globally, follows Chancellor Jeremy Hunt confirming in the Spring Budget this week that the non-domicile status and the tax breaks linked to it would be abolished from next year.

Under the current system, in place for around 200 years, residents with links to another country who plan to eventually leave Britain can avoid tax on any income and gains from assets held outside the UK.

The deVere Group CEO comments: "The non-dom tax status has long been a cornerstone of the UK's appeal to global high-net-worth individuals and their families, offering a unique tax arrangement that allows foreign residents to mitigate their tax liabilities.

"However, the imminent removal of this tax privilege is expected to prompt a significant number of non-domiciled individuals to reassess their residency choices.

"These individuals are internationally-mobile. This will inevitably prompt many of those affected to simply move to more attractive, lower-tax jurisdictions, such as Dubai, Switzerland and Singapore."

These global low-tax jurisdictions offer more than just favourable tax policies; they provide a comprehensive ecosystem that supports business growth and wealth preservation. The influx of affluent individuals into these regions can be expected "to catalyse economic development, attracting new investments and boosting a vibrant entrepreneurial, pro-business spirit."

While the exodus may be a boon for these global destinations, the potential fallout for the UK is a topic of concern.

Nigel Green says: "The expected departure of high-net-worth individuals could result in a reduction of tax revenues, impacting public services and infrastructure development.

"Furthermore, the UK has long benefited from the economic contributions of non-doms, whose direct and indirect investments and business activities have been integral to the nation's prosperity."

He continues: "Additionally, the potential decline in the UK's reputation as a tax-friendly hub may dissuade future investors and entrepreneurs from considering the country as their base of operations.

"The allure of the non-dom tax status has been a pivotal factor in attracting international talent and creating a dynamic business environment.

"Its removal could signal a shift in the global perception of the UK as a favourable destination for wealth creation and business development."

deVere, a cross-border financial specialist with a global presence, says it is already receiving a "slew of enquiries" from non-doms and expats who are considering their options ahead of the policy change and seeking legitimate solutions to mitigate the impact.

It expects this trend to gain momentum as the April 2025 deadline draws nearer.

The deVere Group CEO concludes: "While the anticipated non-dom exodus from the UK following the Spring Budget may herald a new positive era for global low-tax jurisdictions, it's also likely to present serious challenges for the UK.

"Non-doms are already considering their options."

e: george@priorconsultancy.co.uk
t: +44 207 1220 925
Twitter: @PriorConsults

deVere Group is one of the world's largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

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