What does non-dom mean and how are the rules changing?

Labour revealed plans to scrap the non-dom regime in April 2022.

Former Conservative chancellor Jeremy Hunt then announced in the March 2024 Budget that the non-dom tax regime would be phased out.

According to Mr Hunt’s plans, people who move to the UK from April 2025 will not have to pay tax on money they earn overseas for the first four years.

After that period, if they continue to live in the UK, they will pay the same tax as everyone else.

Those people who currently have nom-dom status will be allowed a two-year transition period, during which they will be encouraged to bring their foreign wealth into the UK system.

The former chancellor said getting rid of the non-dom status would raise £2.7bn a year by 2028/29.

The Labour government has vowed to strengthen these planned reforms.

It said it would remove a 50% discount in the first year of the new rules and include foreign assets held in a trust within the UK inheritance tax framework.

New Chancellor Rachel Reeves said Labour’s changes could raise £2.6bn over the course of the next Parliament.