The number of new non-domiciled taxpayers in the UK has dropped 40% in the past year to 8,500 from 14,200, according to law firm Pinsent Masons.
A UK resident non-dom is a person who is resident in the UK but does not intend to live in the UK permanently and so, for tax purposes, is not considered to be domiciled in the country.
The total number of non-doms in the UK has fallen by 11% to 68,300 in the most recent year data is available, which is the 2020-21 financial year.
The sum of tax paid by non-doms fell by £2bn to £7.65bn ($9.3bn, €8.72bn) in 2018, following Brexit and non-dom tax reforms which made the UK’s non-dom regime less generous.
There has been debate on whether the government should limit the non-dom tax status. Non-doms pay tax on their UK income and on money they bring to the UK but do not pay tax on other income and capital gains that they make outside of the UK.
Sophie Warren, tax investigations expert at Pinsent Masons, said : “Non-doms make a highly valuable contribution to the UK economy and any substantial falls in their number could have a significant long-term impact. The government needs to consider what it may lose by placing their status under threat.
“Many non-doms are highly successful entrepreneurs which have established or invested in UK companies. The availability of non-dom status gives the UK a competitive advantage in attracting talented and wealthy individuals. Altering this status now would cause many to consider relocating.”
