This article is from the source 'bbc' and was first published or seen on . The next check for changes will be

You can find the current article at its original source at https://www.bbc.co.uk/news/business-32216346#1

The article has changed 12 times. There is an RSS feed of changes available.

Version 0 Version 1
What does non-dom mean and how many non-domiciled people are there? What does non-dom mean and how are the rules changing?
(6 days later)
Akshata Murty with her husband, Rishi Sunak Akshata Murty with her husband, Prime Minister Rishi Sunak
The government could announce an end to non-dom tax status in the Budget on 6 March. Chancellor Jeremy Hunt has announced that the government will scrap the non-dom tax status in the UK.
People with non-domiciled status do not have to pay tax to the UK on money they make elsewhere. Mr Hunt previously defended the arrangements, arguing they helped ensure that the UK was an attractive place for wealthy people to choose to live and work.
Tories explore scrapping non-dom tax status
What is a non-dom?What is a non-dom?
"Non-dom" is short for "non-domiciled individual". "Non-dom" describes a UK resident whose permanent home - or domicile - for tax purposes is outside the UK.
It's a term used for a UK resident whose permanent home, or domicile, is outside the UK. It refers to a person's tax status, and has nothing to do with their nationality, citizenship or resident status - although it can be affected by these factors.
"Non-dom" is a description of tax status, and has nothing to do with one's chosen nationality, citizenship or resident status (although it can be affected by these factors). A non-dom only pays UK tax on the money they earn in the UK. They do not have to pay tax to the UK government on money made elsewhere in the world (unless they pay that money into a UK bank account).
A non-dom only pays UK tax on money earned in the UK. They do not have to pay tax to the UK on money made elsewhere in the world (unless they pay that money into a UK bank account).
For wealthy individuals, this presents the opportunity for significant - and entirely legal - savings, if they choose a lower-tax country as their domicile.For wealthy individuals, this presents the opportunity for significant - and entirely legal - savings, if they choose a lower-tax country as their domicile.
Possibly one of the most well-known non-doms is Prime Minister Rishi Sunak's wife, Akshata Murty. One of the most well-known non-doms is Prime Minister Rishi Sunak's wife, Akshata Murty.
After her status emerged, she said she would start paying UK tax on earnings outside the UK. After details of her status emerged, she said she would start paying UK tax on her earnings generated outside the UK.
How are the non-dom rules changing?
As part of the March 2024 Budget, Mr Hunt said the non-dom tax regime will be phased out.
From April 2025, people who move to the UK will not have to pay tax on money they earn overseas for the first four years.
After that period, if they continue to live in the UK, they will pay the same tax as everyone else.
Those people who currently have nom-dom status will be allowed a two-year transition period, during which they will be encouraged to bring their foreign wealth into the UK system.
The chancellor said getting rid of the non-dom status will raise £2.7bn a year by 2028/29.
Live: Budget 2024 reaction
Key points from the 2024 Budget
How do you become a non-dom?How do you become a non-dom?
You can become a non-dom in two main ways:You can become a non-dom in two main ways:
Domicile of origin - if you were born in a different country from the UK, or if your father came from a different countryDomicile of origin - if you were born in a different country from the UK, or if your father came from a different country
Domicile of choice - if you are over 16 and choose to leave the UK and live indefinitely in another countryDomicile of choice - if you are over 16 and choose to leave the UK and live indefinitely in another country
What are the rules for non-dom status? Many of the UK's non-doms live in central London areas such as Westminster and Kensington
What are the current rules for non-dom status?
If you are a non-dom and you choose not to pay tax in the UK on your overseas earnings, you must pay:If you are a non-dom and you choose not to pay tax in the UK on your overseas earnings, you must pay:
£30,000 if you've been here for at least seven of the previous nine tax years£30,000 if you've been here for at least seven of the previous nine tax years
£60,000 for at least 12 of the previous 14 tax years£60,000 for at least 12 of the previous 14 tax years
In 2017, the non-dom rules were changed. You can no longer claim this status if you have been a UK resident for 15 out of the previous 20 years, or if all the following conditions apply: In 2017, the non-dom rules were changed to mean you can no longer claim this status if you have been a UK resident for 15 out of the previous 20 years, or if all the following conditions apply:
you were born in the UKyou were born in the UK
your domicile of origin was in the UKyour domicile of origin was in the UK
you were resident in the UK for at least a year since 2017you were resident in the UK for at least a year since 2017
However, if you earn less than £2,000 a year from foreign earnings, and you do not bring that money into the UK, you do not have to do anything.However, if you earn less than £2,000 a year from foreign earnings, and you do not bring that money into the UK, you do not have to do anything.
How much would ending non-dom status save?
Scrapping non-dom tax status could raise £3.6bn a year, research by the London School of Economics and the University of Warwick suggests.
However, whether to take action has been a dividing line between the government and the opposition.
In 2022, Jeremy Hunt was asked on BBC Radio 4 why he had not tightened rules for non-doms. "I would rather wealthy foreigners spent their money in Britain because that supports jobs in our shops, in our restaurants, in our hotels," he said.
Labour has said it would end non-dom status and reports have suggested that it is considering an option giving non-doms a four-year grace period.
Shadow heath and social care secretary Wes Streeting told LBC in January that this option would raise around £2bn.
How many non-doms are there?How many non-doms are there?
According to the latest figures from HM Revenue and Customs, there were 68,800 people claiming non-dom status in 2022. According to the latest figures from HM Revenue and Customs (HMRC), 68,800 people claimed non-dom status in 2022.
This is a slight increase from the previous year but overall, there has been a downward trend since rules were changed in 2017. This is a slight increase from the previous year but overall, there has been a downward trend since the 2017 rule change.
A study of people who were non-dom in 2018, or who had claimed non-dom status since 1997, found that: A study of people who were non-doms in 2018, or who had claimed non-dom status since 1997, found that:
More than 93% were born abroad, and another 4% had lived abroad for a substantial period more than 93% were born abroad, and another 4% had lived abroad for a substantial period
Three in 10 people who earned £5m or more claimed non-dom status, compared with fewer than three in 1,000 among those earning less than £100,000 three in 10 people who earned £5m or more claimed non-dom status, compared with fewer than three in 1,000 among those earning less than £100,000
Most non-doms came from Western Europe, India and the US, although there had been a rapid rise since 2001 of non-doms from China and former Soviet states most non-doms came from Western Europe, India and the US, although there had been a rapid rise since 2001 of non-doms from China and former Soviet states
Most lived in and around London - and more than one in 10 adults in Kensington, the City of London and Westminster were, or had been non-dom. most lived in and around London - and more than one in 10 adults in Kensington, the City of London and Westminster were, or had been non-dom
Related TopicsRelated Topics
TaxTax
Personal financePersonal finance
UK taxesUK taxes
Rishi SunakRishi Sunak