Utmost Wealth has predicted the UK government’s move to overhaul the non-dom tax regime will deter expats from returning to the UK for at least a decade.
Marc Acheson, global wealth specialist at Utmost Wealth Solutions, issued the warning in light of figures published by consultancy Chamberlain Walker that show around 1,800 non-domiciled individuals have left the UK since Chancellor Rachel Reeves scrapped non-dom status in April this year – 50% more than expected.
The residence-based foreign income and gains (FIG) regime has replaced the remittance basis of taxation for UK resident non-doms.
Acheson said: “Chamberlain Walker’s figures chime with what we are seeing, and we have long believed that the OBR’s forecast that the scrapping of the non-dom regime would trigger a 25% departure rate looked conservative.
“The UK has already seen a significant flight of wealth and more are considering international options with increasing regularity.”
Acheson said the first cohort of departures comprised the most wealthy who left before the non-dom changes came into effect in April, while the second, current wave consists of families accelerating plans to leave to coincide with children finishing full time education in the UK.
He added: “While a recent report suggested people are eager to return to the UK at the first opportunity, the reality is that the tax rules discourage this – anyone coming back within six years risks being taxed on income and gains earned while abroad, meaning most will stay outside the UK for a decade or more.
“Meanwhile, other jurisdictions are bending over backwards to attract this wealth, and our loss is very much Italy’s, Switzerland’s, Portugal’s and the UAE’s gain.”
