The end of the ‘non-dom’ tax status

The end of the “non-dom” tax status, which allowed millionaires to pay less tax, has already triggered a first wave of departures. If it continues, the exodus of the super-rich could have a significant impact on the British economy, the press warns.

The privileged tax status enjoyed by wealthy foreigners living in the United Kingdom no longer exists. Since 1799, 
non-domiciled citizens were exempt from paying taxes on their income earned outside the country’s borders for fifteen years. That’s over.

The privileged tax status enjoyed by wealthy foreigners residing in the United Kingdom no longer exists. Since 1799, non-domiciled individuals were exempt from taxes on their income generated outside the country’s borders for fifteen years. That’s over.

Decided in March 2024 by former Conservative Chancellor Jeremy Hunt, the abolition of the “non-dom” regime came into effect on April 6th. This reform was further complicated by Rachel Reeves, the current Chancellor of the Exchequer, who added a component affecting inheritance tax. Not only has the grace period for millionaires been reduced to four years, but all their assets held abroad will now be subject to inheritance tax at a rate of 40%, explains the Financial Times .

The result: “Some have already left, others are leaving,” writes Camilla Cavendish in her column. She believes that inheritance tax was the final straw. “The wealthy are used to paying taxes: in 2022-2023, the 74,000 registered non-doms paid £8.9 billion to the British tax authorities. But when it comes to a lifetime’s work and children, it becomes a personal matter.”

At the end of March, steel magnate Lakshmi Mittal, who had lived in the UK for thirty years, announced his departure. Billionaire Nassef Sawiris, “Egypt’s richest man,” who divided his time between Paris, New York, and London, had preceded him as soon as the reform was announced, Bloomberg reports . According to the London-based consulting firm Henley & Partners, 10,800 millionaires fled the country in 2024—twice as many as the previous year. Only China managed to exodus more last year, Fortune magazine points out . In the ranking of cities with the highest number of millionaires, London slipped from fifth to sixth place.