Labour’s proposal to dismantle the UK’s non-dom tax system may lead to an exodus of the ultra-wealthy, as advisors and research bodies have cautioned.
Switzerland, Monaco, Italy, Greece, Malta, Dubai, and the Caribbean are becoming popular relocation destinations, sensing the apprehension among affluent investors.
Meanwhile, London’s super-prime real estate market could experience a decrease in transactions, although this may present opportunities for wealthy U.S. and other global buyers.
Nearly two-thirds (63%) of affluent investors have indicated they would depart from the U.K. within two years or ‘sooner’ if the Labour government proceeds with its intention to abolish the colonial-era tax concession.
Furthermore, 67% stated they would have chosen not to migrate to Britain initially, as per a recent Oxford Economics study evaluating the impact of these plans.
The UK’s non-dom regime, a tax rule with a 200-year history, allows individuals residing in the UK but domiciled elsewhere to not pay tax on foreign income and capital gains for up to 15 years. As of 2023, an estimated 74,000 people enjoyed the status, up from 68,900 the previous year.
Labour last month set out plans to abolish the status, expanding on a pledge set out in its election manifesto