In recent years, the UK Non-Dom program has been repeatedly criticized and is about to undergo its first changes. Find out more about what this program is, who it is designed for, and what rules will apply in 2024

UK “Non-Dom” is a program that was introduced in Great Britain to attract wealthy foreign investors, because it offered unique tax advantages. Its main idea was to protect foreign income and profits from taxation in Great Britain. However, in recent years, the program has been subject to active criticism. It is predicted that UK Non-Dom will undergo significant changes in the near future.

What is “Non-Dom” status in Great Britain and what changes await the program in 2024? We will find out further.

What is the Non-Dom program in the UK?

The term “Non-Dom” refers to UK residents whose permanent home is outside the UK and therefore their tax liability is also outside the UK.

A person's tax status has nothing to do with their nationality, citizenship or resident status, but these factors can affect it.

According to the legislation, persons with the status of "Non-Dom" pay tax in Great Britain only on the money they earn on the territory of the country. They don't have to pay UK government tax on money earned elsewhere in the world (unless they transfer that money to a UK bank account).

Such a system allows wealthy people to receive considerable and completely legal savings if they choose a country with lower taxes as their place of residence.

Who can get Non-Dom status?

You can become a “Non-Dom” in two cases:

- Place of residence - if you were born outside the UK, or if your father came from another country.

- Residence of choice - if you are over 16 and decide to leave the UK and live in another country for an indefinite period.

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What tax obligations apply to Non-Dom residents in 2024?

Currently, citizens who pay income tax abroad are required to contribute to the economy of Great Britain:

- £30,000 if you lived in the UK for at least seven of the nine previous tax years

- £60,000 for those who have lived in the state for 12 of the previous 14 tax years.

What will change for Non-Dom residents in the UK in 2024?

As part of the budget for March 2024, the leadership of Great Britain announced that the status of "Non-Dom" will be abolished. In particular, from April 2025, people moving to the UK will not have to pay tax on money earned abroad for the first four years. At the end of this period, if they continue to live in the UK, they will pay the same tax as everyone else.

A two-year transition period will be approved for people who currently have Non-Dom status, during which people will be encouraged to transfer their overseas wealth to the UK.

Some statistics about people with the status of Non-Dom in Great Britain

According to the latest figures from HMRC, 68,800 people applied for Non-Dom status in 2022, of which:

- More than 93% were born abroad, and another 4% lived abroad for a significant period of time before applying.

- Three in 10 people earning £5 million or more claimed Non-Dom status, compared to less than three in 1,000 among those earning less than £100,000.

- Most "Non-Dom" residents came from Western Europe, India and the USA, although since 2001 there has been a rapid increase in "Non-Dom" from China and the former Soviet states.

- Most of the representatives live in London and its surroundings.

The UK's “Non-Dom” tax status has long been a topic of debate. The purpose of the tax program was to attract wealthy foreign residents, because it offered a unique tax advantage. However, in 2024, the decision was made to close the program and transfer expats to the general tax system, so people will have a slightly difficult transition period.

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Igor Usyk - Head of Legal Department at Visit World

To understand the specifics of the taxation system of a new country, consult a business lawyer. A specialist will help you find out the intricacies of the new country's legislation, find out about the necessary permits and prepare a package of documents for moving or permanent residence.

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