The Labor government is pushing ahead with tax reforms outside the cabarets

Non-doms hoping for changes or delays in the new Labor government’s reforms will be disappointed by the US Treasury policy document published yesterday, according to leading audit, tax and business consultancy firm Blick Rothenberg.

Nimesh Shah, CEO of Blick Rothenberg, said: “Non-doms who insist on changes or a delay to the Conservative Government’s original proposals will be disappointed as the reforms will be largely the same as those announced by Jeremy Hunt in his latest Spring Budget as Chancellor.”

Shah added: “The new government has committed to implementing the four-year Foreign Income and Gains (FIG) regime from April 6, 2025, and there is a clear intention to implement that change as soon as possible.”

The policy document has shortened some of the original transitional provisions for the switch to the FIG regime. This includes abolishing the first-year foreign income tax credit, suggesting an increase in the tax rate for the temporary repatriation facility and confirming the abolition of the inheritance tax exemption for trusts. Shah indicated: “There is a clear signal that this Labor government wants to end the non-dom regime.”

Many non-doms have been critical of the proposals, with reports suggesting they are considering moving to countries such as Italy, the UAE and Switzerland, which offer tax breaks. Confirmation that the Labor government is going ahead with its plans is likely to strengthen and, in some cases, accelerate plans to leave Britain.

Shah noted: “In some ways it is helpful that the new government has clarified its position and a line has been drawn. While the final details of the rules will not be known until the Autumn Budget on October 30, 2024, we should not expect any reversals given the clear tone in the policy document.”