(Bloomberg) -- The UK will end a system that offered tax breaks to the country’s wealthiest foreigners in a move that Chancellor of the Exchequer Rachel Reeves said would raise £12.7 billion ($16.5 billion) over the next five years.
Non-doms — foreign residents who span City of London bankers to multibillionaires — currently don’t pay UK taxes on their overseas earnings for as long as 15 years.
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Instead, the country will introduce a residence-based program, Reeves said the budget Wednesday, her first since the Labour party took power. The new regime will offer competitive arrangements to wealthy foreigners coming to the UK on a temporary basis, she said. The last Conservative government had also proposed replacing the current system.
“We will remove the outdated concept of domicile from the tax system from April 2025,” Reeves said. “I have always said that if you make Britain your home, you should pay your taxes here too.”
The previous government had introduced a temporary repatriation facility, allowing non-doms to bring previously-earned foreign income and gains into the UK at a tax rate of 12% for two years until April 2027.
Reeves said Wednesday she’s planning to extend that relief to a third year as well as expand the scope of the facility.
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