UK's Ultra-Rich Non-Doms: Italian-Style Tax Regime to Stem Wealth Exodus
Wednesday, Oct 16, 2024 10:56 am ET
As the UK government contemplates changes to the non-domiciled (non-dom) tax regime, the country's ultra-rich non-doms are urging the adoption of an Italian-style tiered tax regime to prevent a wealth exodus. The proposed regime aims to balance the need to attract and retain wealthy non-doms while ensuring fairness in the tax system for UK residents.
The current non-dom regime allows individuals to pay UK tax only on their UK earnings and capital gains, with foreign income and gains taxed only when remitted to the UK. However, the UK government is considering abolishing this regime, which has led to concerns among non-doms about their tax liabilities and potential inheritance tax implications.
An Italian-style tiered tax regime, as proposed by the lobby group Foreign Investors for Britain (FIFB), would charge wealthy foreign nationals a flat rate of tax based on their net wealth. The regime would consist of four bands, with annual charges ranging from £200,000 to £2m. Those with a net wealth under £100m would pay an annual charge of £200,000, while non-doms worth over £500m in net assets would pay £2m a year.
The proposed regime would protect foreign assets from inheritance tax and exempt them from tax on foreign income and capital gains. It would also exempt non-doms from tax on UK investments for up to 15 years. According to a survey conducted by Oxford Economics, 73% of non-doms would stay in the UK for longer if the proposed regime were introduced.
The tiered tax regime would address non-doms' concerns about inheritance tax and foreign income/capital gains tax. By offering a flat rate based on net wealth, the regime would provide certainty and clarity for non-doms, making it easier for them to plan their financial affairs. Additionally, the regime would ensure that non-doms contribute significantly to the UK's public finances, with FIFB estimating that non-doms paid £8.9bn in taxes last year.
The Italian-style tiered tax regime would also help the UK government attract and retain wealthy non-doms, who contribute significantly to the economy. According to a report by Henley & Partners, the UK is projected to lose 9,500 millionaires to migration in 2024 alone. A tiered tax regime could help stem this outflow, ensuring that the UK remains an attractive destination for wealthy non-doms.
In conclusion, the UK's ultra-rich non-doms are urging the government to adopt an Italian-style tiered tax regime to prevent a wealth exodus. The proposed regime would address non-doms' concerns about inheritance tax and foreign income/capital gains tax, while ensuring that they contribute significantly to the UK's public finances. By offering a flat rate based on net wealth, the regime would provide certainty and clarity for non-doms, making it easier for them to plan their financial affairs. The tiered tax regime would also help the UK government attract and retain wealthy non-doms, ensuring that the country remains an attractive destination for high-net-worth individuals.
The current non-dom regime allows individuals to pay UK tax only on their UK earnings and capital gains, with foreign income and gains taxed only when remitted to the UK. However, the UK government is considering abolishing this regime, which has led to concerns among non-doms about their tax liabilities and potential inheritance tax implications.
An Italian-style tiered tax regime, as proposed by the lobby group Foreign Investors for Britain (FIFB), would charge wealthy foreign nationals a flat rate of tax based on their net wealth. The regime would consist of four bands, with annual charges ranging from £200,000 to £2m. Those with a net wealth under £100m would pay an annual charge of £200,000, while non-doms worth over £500m in net assets would pay £2m a year.
The proposed regime would protect foreign assets from inheritance tax and exempt them from tax on foreign income and capital gains. It would also exempt non-doms from tax on UK investments for up to 15 years. According to a survey conducted by Oxford Economics, 73% of non-doms would stay in the UK for longer if the proposed regime were introduced.
The tiered tax regime would address non-doms' concerns about inheritance tax and foreign income/capital gains tax. By offering a flat rate based on net wealth, the regime would provide certainty and clarity for non-doms, making it easier for them to plan their financial affairs. Additionally, the regime would ensure that non-doms contribute significantly to the UK's public finances, with FIFB estimating that non-doms paid £8.9bn in taxes last year.
The Italian-style tiered tax regime would also help the UK government attract and retain wealthy non-doms, who contribute significantly to the economy. According to a report by Henley & Partners, the UK is projected to lose 9,500 millionaires to migration in 2024 alone. A tiered tax regime could help stem this outflow, ensuring that the UK remains an attractive destination for wealthy non-doms.
In conclusion, the UK's ultra-rich non-doms are urging the government to adopt an Italian-style tiered tax regime to prevent a wealth exodus. The proposed regime would address non-doms' concerns about inheritance tax and foreign income/capital gains tax, while ensuring that they contribute significantly to the UK's public finances. By offering a flat rate based on net wealth, the regime would provide certainty and clarity for non-doms, making it easier for them to plan their financial affairs. The tiered tax regime would also help the UK government attract and retain wealthy non-doms, ensuring that the country remains an attractive destination for high-net-worth individuals.