Rachel Reeves may be digging her fiscal black hole even deeper by handing an easy exit to non-doms planning to leave in the next tax year, say leading audit, tax and business advisory firm, Blick Rothenberg.
Nimesh Shah, CEO of the firm, said, “Buried in the technical detail of the new Labour Government’s non-dom changes is a bizarre transitional rule. The rule gives non-doms an exit route out of the UK in the next tax year without being caught by the new ‘10-year tail’ for inheritance tax.
“This rule offers an easy exit for non-doms who are already looking to leave, making it feel as if the Chancellor is handing them first class plane tickets to get out of the UK as quickly as possible.
“Non-doms were deeply concerned by the 40% inheritance tax impact in Jeremy Hunt’s original proposals, leading them to seriously question their future in the UK and to some taking steps to leave during the summer.”
He added, “With a steady exodus of non-doms already in motion, the detail of the reforms announced at the Autumn Budget will undoubtedly accelerate relocation plans. Those non-doms who may have remained in the UK for a longer period may now want to bring forward their plans to explore if an exit route next year is feasible.
“This raises serious concerns around whether the government will raise anywhere close to the £12.7 billion projection announced in the Autumn Budget – if the non-doms have gone, where does the government think the money is coming from? It feels like Rachel Reeves is only digging her fiscal black hole deeper.
He added: “The £12.7 billion always felt like a punchy target, given the backdrop, and the bar is now pushed even higher when you consider the broader changes to capital gains tax, inheritance tax reliefs and carrier interest rules – I think the government only made their job much harder.”
