UK tax system shake-up: Non-dom status changes to affect thousands of wealthy residents

The UKʼs non-dom tax system - which lets wealthy foreign-based people avoid taxes on overseas earnings - is getting a big make-over

In Britain today non-doms (people who live here but keep their tax home elsewhere) dont have to pay UK taxes on money they make abroad. About 55‚000 people use this set-up which has been around for many years: some pay just a yearly fee of £30‚000 after living here 7 years; others pay £60‚000 after 12 years

The government wants to change things up by 04/25 - making a new system where:

• New arrivals get 4 years tax-free on foreign money
• They must be gone from UK for 10 years before this
• Special temp rules to bring old money into UK
• Different inheritance-tax rules might come too

Akshata Murty wife of Rishi Sunak made news when people found out she was a non-dom (sheʼs since changed this). Like her many rich folks use this setup - research shows 1 in 5 bankers were non-doms back in 22

The Adam Smith Institute thinks ending non-dom rules could cost UK £6.5bn by 35 and kill 23‚000 jobs by 30 (from less investment and spending) However; experts at LSE say the Treasury might get £3.6bn more in taxes - though some warn rich people might just leave

Non-doms paid over £6bn in tax during 20-21 which shows how much money is involved here. The new system aims to be fair but keep UK attractive for international money - its a tricky balance that needs to work out