Summer Budget: Chancellor recognises non-doms’ economic contribution but still makes fundamental changes

Summer Budget: Chancellor recognises non-doms’ economic

Jo Bateson, private client tax partner at KPMG in the UK, comments on the changes to the rules for non-UK domiciled individuals.

Also on

  • Individuals resident for 15 out of 20 years in the UK will lose their non-dom status
  • To regain a domicile outside the UK, taxpayers will have to leave the UK for 5 years.

Commenting on the changes to the rules for non-UK domiciled individuals announced in today’s budget, Jo Bateson, private client tax partner at KPMG in the UK, said:

“Non-dom taxpayers have come under the spotlight recently.  The Chancellor’s announcements today go some way to limiting the advantages they enjoy while stopping short of abolishing the regime entirely in recognition of their overall contribution to the economy.

“From April 2017, those non-doms who have been resident in the UK for more than 15 out of the past 20 tax years will be treated as deemed UK domiciled for all tax purposes.  The only way they can regain non-dom status is to leave the country more or less entirely for five full years (up from four previously).

“Then, from the 16th year of residency in the UK, non-UK domiciled individuals will be subject to income tax, capital gains tax and inheritance tax on both their UK and worldwide income which effectively removes their non-dom tax status. This brings a fundamental change to the regime where previously an individual could be considered non-UK domiciled for income tax and capital gains tax purposes without reference to the number of years spent in the UK.

“Non-UK domiciled individuals should note that the current charges associated with claiming the ‘remittance basis’ and thus enjoying non-dom status will remain in place (£30,000 if resident for 7 of the previous 9 tax years and £60,000 if resident for 12 of the 14 previous tax years).

“The Government has also tightened the rules for those individuals who have a ‘domicile of origin’ in the UK (ie being of British origin or heritage), making it more difficulty to shed this “sticky” status.

“For some individuals, today’s changes are a huge blow.  We are awaiting the details of the proposals which are due to be released shortly and will show whether there are any transitional provisions which might help non-doms to prepare for the changes.  Overall, the measures introduced may make our non-dom regime less contentious, while simultaneously helping to ensure that the UK is an attractive place for wealthy individuals and entrepreneurs to locate.  And we hope they will make it sustainable for the long term.”


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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff.  The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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