Reeves considers u-turn on non-dom tax amid sharp rise in wealth exodus

Mace | 18th June 2025 | Policy & Think Tanks, Politics

05/07/2024. London, United Kingdom. Rachel Reeves, Chancellor of the Exchequer poses for a photograph following her appointment to Cabinet by Prime Minister Sir Keir Starmer in 10 Downing Street. Picture by Lauren Hurley / No 10 Downing Street

Rachel Reeves is considering diluting Labour’s proposed inheritance tax reforms for non-doms after a rise in wealthy individuals leaving the UK. More than 4,400 directors have resigned in the past year, with high-profile business figures relocating. The Treasury is reviewing policy details ahead of the 2026 rollout.

Chancellor Rachel Reeves is considering a revision of Labour’s flagship overhaul of the non-domiciled tax regime following mounting evidence that high-net-worth individuals are leaving the United Kingdom in greater numbers than initially projected. Internal discussions have centred on potentially softening the proposed extension of inheritance tax on foreign assets held by non-doms, in an attempt to stem the outflow of capital and talent from the country. The Treasury is reviewing implementation plans ahead of the April 2026 deadline for the changes, which would bring the worldwide assets of non-doms into scope for British inheritance tax. The current proposals replace the long-standing system allowing wealthy residents with foreign domiciles to shield offshore income and assets from UK taxation by paying an annual charge starting at £30,000. The change has already coincided with a notable increase in wealthy individuals and business figures relocating. According to Companies House dat...

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