U.K. Non-Dom Regime following UK election

The new regime is expected to be introduced by April 2025.

The new government is expected to abolish resident non-domicile status and the allowance basis.

Further, it seems it will not offer some of the transitional reliefs planned by the previous Conservative government.

 

In particular, the previous government intended to provide a grandfathering shield for pre-April 2025 trusts settled by non-doms, so that assets in such trusts would not be subject to UK inheritance tax (IHT).

The Labor government has suggested it will not offer this protection, with its pre-election manifestos saying all trusts settled by UK-resident settlors will be within the scope of UK IHT from 6 April 2025 after the settlor has been UK-resident for ten years.

This would apply regardless of when the trust was settled, although trusts where the settlor is already deceased or is non-UK resident may not be caught.

The new government will consider offering investment incentives during the new four-year tax-free remittance window to encourage more investment in the UK.

It may also consider ways to encourage individuals who formerly claimed the remittance basis to remit foreign income and gains to the UK, although it has yet to give specifics.

More details are expected in the King's speech at the State Opening of Parliament on 17 July 2024.

Font:

STEP Journal July 8, 2024

https://labour.org.uk/change/labours-fiscal-plan/

https://www.step.org/industry-news/uk-non-dom-system-be-replaced-grace-period-new-arrivals

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