> The exemption was restricted over time to largely benefit foreigners who don’t expect to live in the U.K. permanently.
Sounds like it worked out as planned, since they're leaving now.
Plus, 40% inheritance tax is crazy. You'd have to sell off half of what you inherit to pay the tax. Sucks if you're a farmer or a multigenerational family business
> a centuries-old tax loophole, abolished in April, that catered to the global rich. The nondomiciled—or non-dom status, as it is known—allowed foreigners living in the U.K. to pay tax only on what they earned domestically. Profits made abroad were ignored unless brought into the U.K.
I don't understand. Why is this a loophole? Why is money earned abroad and kept abroad taxable not by a foreign government but by the UK government?
Does London need the Global Rich hanging around if they’re not willing to pay taxes? Is it necessary to have the tax bring in 30 Billion in order for it to be considered a success?
If nothing else, this tax demonstrates to those who DO pay tax, that the Government is willing to treat earners equally and fairly, regardless of how much tax it brings in.
They do pay taxes though. Non domiciled are roughly 0.11% of UK residents and pay about 1.24% of UK taxes. This change is likely to lower tax revenues.
_good_. the average person is struggling to feed and shelter themselves and we’re worried that if we don’t coddle the rich the economy will collapse. let them leave and we can rebuild a society that supports everyone.
Wrong, our society is here to support pensioners (one fifth of the population) and those on disability benefits (one quarter of the working age population). Every millionaire that leaves, leaves a disproportionate hole in the amount of tax collected and we borrow more to cover the gap. This will continue until the IMF is forced to step in.
Is this a bad thing? You'd only leave if you weren't contributing to the local economy. People who, for example, run a small business in the UK aren't impacted at all.
The irony of a superrich claiming to feel 'unwelcome' in a country while claiming non-domiciled status in it cannot be lost on the author. Also, for all the talk of scaring away "job creators" I doubt the guy running a "Dubai-based venture capital firm" was creating many jobs in the UK.
I wonder what people actually think of this result. "tax-the-rich" makes very limited sense unless applied internationally. Many of the super rich are super rich because they have serious influence over, or outright control of foreign states (US rich are a large exception worldwide). Nobody in the US is even 1% as rich as Putin, or Xi, or frankly even just as rich as the grand duke of Luxembourg is.
You cannot tax these people directly, because they'll leave.
You cannot have international cooperation on tax treaties because these people control states.
In other words: you can only tax them either through war, or by totally blowing up trade relationships.
One of these rich persons you mentioned is very unlikely to decide he's going to leave Moska-Oblast and retire in Monaco or anywhere else that's doesn't have a thick bunker at the ready for him.
The British government closed this loophole because it's politically easier than the strategy which is actually needed: properly taxing assets.
This is much harder to evade - if you own most of Mayfair, you can't just move your assets elsewhere - they are very clearly tied to the location.
Of course, this would mean taxing powerful aristocrats, including the royal family.
With their large majority, the British government had the opportunity to do this, but decided to take an easier path. The reason why this path was easier is now becoming clear to them.
As you pay more tax, you get less services, and I dont just mean, where you elect to avoid them. You get less (or none at this point) free childcare. No umemployment benefits if you get fired. No child benefit. You can't save as much in your pension.
Then there are the semi-elective things like healthcare, education, home security. These kinda dont work for the whole society. The rich are thus paying for their own out of pocket. But they are also paying for the semi-working system for everyone else.
I think introducing a wealth tax just to balance the books without rethinking who and how accesses public funds, will just end with the rich leaving. Some may say good riddance, but the UK budget is now beyond creaking and heading for collapse.
Oh and when I say "the rich", that probably covers many people here. IIRC earning 90k per year puts you in the top 1%. A 10-15 year experience NHS doctor is in that bracket.
The rich benefit most from a stable society and the rule of law though.
No point owning most of Mayfair if you don't feel safe enough to enjoy your lifestyle.
And it's not just funding the police and courts that leads to this - it's making sure there aren't too many desperate people with no hope. ie paying unemployment benefit so people can live while looking for work - is all part of that stable society from which everyone benefits - but particularly the rich as they have more to lose.
The number of non-doms fell from 74,100 to 73,700 in the year up to April 2024, whilst tax intake from them increased by £100m. I do not consider 400 out of 74,100 as them fleeing....
[1]: Non-dom tax take jumped £100mn in 2023-24 despite falling numbers - https://on.ft.com/3Gx1MXU via @FT
That's the thing I never understand about tax the rich, as soon as you do that they're going to leave. Well even before you do that they're going to leave. And a lot of these people do employ a lot of people so they just start companies elsewhere.
And even if you took let's say 95% of their wealth that wouldn't even pay down half of the US debt.
I think all this stuff ends up doing is being a brain drain to make people leave whatever country they're in for other countries
> And a lot of these people do employ a lot of people so they just start companies elsewhere.
Great, do that! Go start companies in other countries, and trickle down their wealth to employees in the form of wages and salaries.
If only they thought of doing that in the UK! Instead of the rich buying up properties turning them into buy-to-lets, both pricing out working people of their first home, and then taking their income as rent.
Are these people really "investors and entrepreneurs" in the UK economy if they were staying there specifically as a tax dodge, when any profits from UK economic activity would always have been taxed?
If you accept the premise that these individuals are net contributors (paying far more in taxes than they consume in services), and that their income and assets are largely non-UK and mobile, then the reality is simple: you either compete for them and treat them differently, or you lose them to jurisdictions that will.
If I bring in $2 billion in cash to a 100 person town in the US, with a median income of $40k: I can hire none, some, or all of them for $40k to $60k; and make the cost of living too expensive by buying up most of the land, to the point that the remaining stock will cost double or triple the cost.
This is the majority of the oligarch class (Russia, China, Middle East, private equity) who’ve streamed into the democratic West and is an absolute net negative.
Then you have billionaires like
Musk (politics aside) who aren’t parking their wealth but building new industries; and the cost of living goes up because of the wages and perhaps demand, as more workers stream in (net positive).
Then you have the rest of the billionaires (high finance, Amazon) whose method is wealth extraction through consolidation and off-shore labor (arguably net negative).
I’m not even “rich” and yet thinking of moving myself and my assets somewhere else like Dubai. Why should I pay into a system I get virtually nothing out of? Furthermore my country took my freedom of movement in the EU away. That’s another incentive for me to leave - five years in Portugal and I get freedom of movement back.
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[ 2.5 ms ] story [ 59.1 ms ] threadThere was no magical property of London that attracts people DESPITE higher taxes.
Very difficult to have any policy discussion when a second order effect is involved.
Sounds like it worked out as planned, since they're leaving now.
Plus, 40% inheritance tax is crazy. You'd have to sell off half of what you inherit to pay the tax. Sucks if you're a farmer or a multigenerational family business
https://www.newstatesman.com/politics/2025/07/the-british-we...
You cannot tax these people directly, because they'll leave.
You cannot have international cooperation on tax treaties because these people control states.
In other words: you can only tax them either through war, or by totally blowing up trade relationships.
This is much harder to evade - if you own most of Mayfair, you can't just move your assets elsewhere - they are very clearly tied to the location.
Of course, this would mean taxing powerful aristocrats, including the royal family. With their large majority, the British government had the opportunity to do this, but decided to take an easier path. The reason why this path was easier is now becoming clear to them.
Then there are the semi-elective things like healthcare, education, home security. These kinda dont work for the whole society. The rich are thus paying for their own out of pocket. But they are also paying for the semi-working system for everyone else.
I think introducing a wealth tax just to balance the books without rethinking who and how accesses public funds, will just end with the rich leaving. Some may say good riddance, but the UK budget is now beyond creaking and heading for collapse.
Oh and when I say "the rich", that probably covers many people here. IIRC earning 90k per year puts you in the top 1%. A 10-15 year experience NHS doctor is in that bracket.
No point owning most of Mayfair if you don't feel safe enough to enjoy your lifestyle.
And it's not just funding the police and courts that leads to this - it's making sure there aren't too many desperate people with no hope. ie paying unemployment benefit so people can live while looking for work - is all part of that stable society from which everyone benefits - but particularly the rich as they have more to lose.
It's these that need to be tackled - not just because of tax evasion, but because they are also a large part of the workings of organised crime.
[1]: Non-dom tax take jumped £100mn in 2023-24 despite falling numbers - https://on.ft.com/3Gx1MXU via @FT
The minimum corporate tax of 15% is one place to start:
https://taxfoundation.org/blog/global-tax-agreement/
And even if you took let's say 95% of their wealth that wouldn't even pay down half of the US debt.
I think all this stuff ends up doing is being a brain drain to make people leave whatever country they're in for other countries
Great, do that! Go start companies in other countries, and trickle down their wealth to employees in the form of wages and salaries.
If only they thought of doing that in the UK! Instead of the rich buying up properties turning them into buy-to-lets, both pricing out working people of their first home, and then taking their income as rent.
If I bring in $2 billion in cash to a 100 person town in the US, with a median income of $40k: I can hire none, some, or all of them for $40k to $60k; and make the cost of living too expensive by buying up most of the land, to the point that the remaining stock will cost double or triple the cost.
This is the majority of the oligarch class (Russia, China, Middle East, private equity) who’ve streamed into the democratic West and is an absolute net negative.
Then you have billionaires like Musk (politics aside) who aren’t parking their wealth but building new industries; and the cost of living goes up because of the wages and perhaps demand, as more workers stream in (net positive).
Then you have the rest of the billionaires (high finance, Amazon) whose method is wealth extraction through consolidation and off-shore labor (arguably net negative).