Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment her Department has made of the potential impact of ending the non-domiciled tax status on the financial sector.

The Government’s priority is improving the UK’s competitiveness internationally and securing economic growth. The non-domicile reforms have been specifically designed to make the UK competitive with a modern, simple tax regime that is also fair. The reforms establish a tax regime for new residents, which is more attractive to new arrivals than the current rules.

As part of the reforms, the Government also wants to incentivise non-domiciled individuals who are not eligible for the new regime to spend and invest their foreign income and gains in the UK. That is why existing and previous users of the remittance basis will be able to take advantage of a three-year Temporary Repatriation Facility (TRF) to bring their offshore funds to the UK at a discounted tax rate.

The Government has also reformed Overseas Workday Relief to ensure the UK remains competitive with other countries that offer similar schemes for talented internationally mobile employees. The Government wants to continue to encourage highly skilled workers to work in the UK and contribute their skills to the workforce, including in the financial services sector.

The Government published a Tax Information and Impact Note for this policy at Autumn Budget 2024. This can be found here:

https://www.gov.uk/government/publications/tax-changes-for-non-uk-domiciled-individuals/reforming-the-taxation-of-non-uk-domiciled-individuals.