Finance Bill

Lord Markham Excerpts

2nd reading & Committee negatived & 3rd reading
Wednesday 19th March 2025 Lords Chamber

[Lord Markham (Con)]

My Lords, I also welcome the noble Baroness, Lady Caine of Kentish Town, to the House. I believe that her worldwide experience, her business expertise in the creative industry and her steely determination from such a young age will be a real asset to the House and I welcome her here today.

I come at this issue from a slightly different perspective. While there are many points in the Bill that I disagree with, I accept that it will pass. I want to concentrate on what I see as the chance for a few unintended consequences.

As noble Lords are aware, I am a business guy and invest in lots of businesses. I have come across a lot of high net worth non-doms during that time and, for better or worse, a lot of tax advisers. From that, I have learned three main things. First, high net worth non-doms are very mobile; secondly, tax advisers are very risk averse; and, thirdly, tax advisers generally have significant sway over their clients. This leads them to give UK non-doms two bits of advice that I know go against what the Government intend to do. The Minister himself has said they are hoping to attract the best talents from around the world, but I fear this will not be the case.

First, in terms of the changes to the transfer of assets from abroad, the Bill intends that non-doms will be taxed only on future overseas earnings. However, my understanding is that tax advisers are telling non-doms that they think this might be applied retrospectively. I know this is not the intention, but HMRC needs to urgently provide clarity on this, because non-doms are being advised that they should leave, and I know that is not what anyone wants.

Secondly, the temporary reparation facility is a measure designed to give people a reduced rate of 12% to 15% on any assets they transfer into the UK for a period of three years. Again, this clearly seeks to encourage non-doms to bring those assets into the UK, to the wealth and benefit of the country. Unfortunately, again, tax advisers are highlighting the risk that, in future, HMRC or the courts might reclassify this as a tax avoidance scheme. Again, I know that is not the intent here, but unfortunately that is what tax advisers are currently advising and there is a real danger from that that high net worth non-doms will be put off and, again, will decide to leave as a result.

I know that neither of those things is the intention of the Government, so I urge them to urgently put out guidance to spell out that this is not a risk, otherwise—although, as I say, I know this is not the intent—it is likely to happen. I offer these points, hopefully in the spirit of helpfulness, and I hope the Minister will provide the necessary assurances as quickly as possible to make sure that this does not happen.