In March 2024, the-then Conservative chancellor Jeremy Hunt announced that the non-dom tax regime would be phased out.
However, he also introduced concessions which were designed to reduce the incentive for wealthy foreigners with a permanent home abroad to emigrate.
While no specific policy has been put to the OBR as part of the process for next month’s Budget, Treasury officials acknowledge that plans by Labour to scrap two concessions made by the previous government might not raise the £1bn they thought it would, or indeed any money at all.
The £1bn is earmarked in the Labour manifesto for extra hospital and dental appointments and school breakfast clubs.
About half the money raised from the wider abolition plan was already forecast to be lost in changes of behaviour.
Nimesh Shah, chief executive of Blick Rothenberg, a tax advisory and accountancy firm which acts for wealthy individuals, told the BBC’s Today programme, that some non-doms had begun leaving the UK after Hunt’s spring Budget.
“But I think the bigger majority, from my experience, has been that a number of people are planning to leave over the next 12 to 18 months,” he said.
“Practically, it is difficult to leave a country. There’s schooling for children, there’s jobs, there’s businesses, housing – these things do take time so people are taking them time about where to go.”
Meanwhile, Nadhim Zahawi, who was chancellor in the previous Conservative government, claimed: “I was told over the summer that in July alone British applications for residency in places like Monaco was 5,000 people.”
At the time of the spring Budget in March, the OBR assessed that the revenue raised from non-doms was “highly uncertain”. It said that many non-doms “opt in and out on a year-by-year basis, making it difficult to project future trends”.
Small changes to assumptions about emigration, for example, could mean the planned additional tightening of the plan could raise very little.
