Non-Dom left out FA24

After announcing an early election, the government rushed to have the Finance Bill with the 2024 Spring Budget measures passed into law. However, one of the most notable of the reforms on the Non-Domiciled Status is missing.

The 2024 Spring Budget included an announcement that the rules for “non-domiciled” individuals would be completely overhauled in 2025, with a residence-based test granting a short period of tax-free overseas income and gains for individuals moving to the UK.

A detailed technical note was published shortly afterwards explaining how the new rules would work. However, following the announcement of the 4 July general election, the plans appear to have been abandoned as there are no clauses relating to the reforms in the Finance (No. 2) Act 2024, which received Royal Assent on 25 May 2024.

It’s likely that there will be some level of reform, regardless of who forms the new government next month. Unfortunately, that’s about all we can say at this point.

Abolishing the non-domiciled status has long been a Labour policy and when the Spring Budget’s version of this was published, the party criticised perceived loopholes. So, it’s unlikely that reform will be abandoned completely. Hopefully we will get details of proposed changes in the run up to the election from both sides of the Commons, so we have some opportunity for planning and structuring on client’s affairs once a new government is formed.