Article by Verfides
The Labour Party's pledge to abolish the non-domicile tax regime if it forms a government following the UK General Election to be held on 7th May is causing both existing and prospective non-doms, and of course their advisors, to review and reconsider their plans.
We have received enquiries from a number of prospective non-doms including some who are postponing their relocation to London and the purchase of high-value residential property here.
We are also speaking to existing non-doms who want to consider the planning opportunities available to them in advance of the possible abolition of the current non-domicile tax regime.
The Labour Party is banking on winning votes among those opposed to a tax regime which they say unfairly favours wealthy foreigners and British citizens with foreign connections. But the proposed abolition is generating significant controversy as critics maintain it would in fact have a negative effect, resulting in reduced foreign migration to and investment in the UK; which does positively impact the UK economy and tax revenues. It is also likely that there would be an exodus of existing wealthy non-doms. The Conservatives have even highlighted that the Labour Shadow Chancellor has himself previously admitted that a complete abolition could negatively impact the UK in revenue terms.
Further concern is being caused by the Labour Party election manifesto which pledges to restore the 50% rate of income tax for earnings over £150,000, to restrict tax relief on pension contributions for high earners and to introduce a "mansion tax" on properties worth over £2m.
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