Growth in UK non-doms slowed by finance act
The number of resident non-doms (RNDs) arriving in the UK has fallen in the years since the introduction of the Finance Act 2008, according to research from Cass Business School.
The research, undertaken for advisory firm Stonehage, found while the £30,000 charge imposed on RNDs resident in the UK for more than seven years was not a main issue, the perceived hostility underlying the FA 2008 and complexity of the changes had put RNDs off coming to or staying in the UK.
When HM Treasury introduced the Act it projected collecting additional revenue of £650m from the UK’s 140,000 strong RND population, however Stonehage estimates that, as a result of the concerns outlined above, RND growth will slow by at least a quarter, with 2% having already left the UK. This would mean an immediate annual reduction in tax contribution of £166m and may turn the projected £650m gain into a loss in the short term.
In contrast, Stonehage says unimpeded growth in the RND population, of at least 4% per annum, would have resulted in the current tax contribution nearly doubling to £14bn by 2018. However, Stonehage says a reduction in growth of just 1% to 3% per annum would make the FA 2008 changes loss making for the UK within five years.