UK: UK may rethink non-dom inheritance tax

The UK government is reviewing its recent move to impose inheritance tax on global assets of non-domiciled residents, following a wave of departures among high-net-worth individuals and lobbying from the City of London. According to the Financial Times, Chancellor Rachel Reeves is open to reversing this component of the non-dom regime overhaul, introduced in April, amid concerns over its impact on international competitiveness.

A senior government official acknowledged that taxing global assets at 40 per cent was “causing most heartburn”. Another official told FT that changes could be made if it benefits Britain’s economic position. According to one City financier familiar with Reeves’ stance, the government is seeking a way to “backtrack without backtracking” on the inheritance tax changes. Another City executive said, “There will most likely be some tweaks to inheritance tax to stop the non-dom exodus.”

The abolition of the non-dom tax regime and the closure of offshore trust loopholes have already triggered relocations to lower-tax destinations such as the UAE, Italy, and Switzerland. High-profile names like steel tycoon Lakshmi Mittal and Egyptian billionaire Nassef Sawiris are among those reportedly exiting the UK.

“The government will continue to work with stakeholders to ensure the new regime is internationally competitive and continues to focus on attracting the best talent and investment to the UK,” the Treasury said.

The non-dom reforms were originally announced under the Conservative government and confirmed in Reeves’ October Budget. Reeves is said to be “listening” to concerns raised by the City. “We aren’t complacent,” said one ally. “We want to make sure Britain is an attractive place to be. We are getting a lot of feedback.” Inputs are reportedly being relayed by Number 10 adviser Varun Chandra and Business Secretary Jonathan Reynolds, who have received concerns from international investors.

Alastair King, Lord Mayor of the City of London, has also expressed apprehensions, linking the policy changes to risks for the City’s future. Alongside the non-dom issue, the removal of VAT exemptions for private school fees and inheritance tax amendments have raised alarm among financial professionals. “Lots of people in the City, not just billionaires,” have been affected, one broker told the Financial Times.

Despite internal debate, any rollback may pose political risks for Reeves. The Labour government has already reversed a plan to end winter fuel payments for 10 million pensioners and is seeking to save £5 billion by reducing sickness and disability benefits.

The Opposition had earlier projected that closing the trust tax loophole would raise £430 million annually. However, the Office for Budget Responsibility has downgraded that estimate to £200 million by 2029–30.

Reeves’ Budget last year also reformed agricultural and business property reliefs, making more estates and companies liable for inheritance tax. From April 2026, assets above £1 million will be taxed at 20 per cent. Legal experts have flagged this as a fresh cause for business owners to leave the UK. “By forcing people to leave the UK, you don’t get 20 per cent of the value of their business, you get 0 per cent,” said Ceri Vokes of law firm Withers.

A final decision may be announced in the autumn Budget, depending on the Treasury’s assessment and the political calculations ahead.

20 March 2025

US: SEC drops case against crypto firm with ties to Trump, CEO says

The Securities and Exchange Commission has ended its yearslong case and appeal against a cryptocurrency firm whose CEO has ties to the White House, the CEO said Wednesday. Brad Garlinghouse, the CEO

Read More
27 June 2025

GLOBAL: Billionaires’ wealth surged $6.5tn over past decade, Oxfam reports

The wealth of the world’s 3,000 billionaires has surged by $6.5tn (£4.8tn) in real terms over the past decade, according to Oxfam, equivalent to 14.6% of global output. In total the richest 1% of

Read More
7 February 2025

EU: Czech president signs ‘landmark’ crypto bill

Czech President Petr Pavel has reportedly signed a “landmark” cryptocurrency legislation into law, providing Czechia with regulatory clarity on digital assets that are aligned with broader European

Read More
27 February 2024

HEDGE FUNDS: Hedge Funds Are Dumping Tech at the Fastest Pace in Months

Nvidia’s blockbuster earnings report last week has been followed by big outflows from the tech sector among hedge funds as they look to take some chips off the table after piling in ahead of the

Read More