UK softens stance on non‑resident tax rules amid exodus
CNBC reports that the United Kingdom plans to ease the proposed changes to the controversial tax rules for non-residents. The American broadcaster notes that nearly 11,000 millionaires left the country last year.
The current system, which is now 200 years old, allows people living in the UK but with tax residency elsewhere to avoid paying taxes on income and capital gains earned abroad for up to 15 years.
This system has long been contentious, causing Finance Minister Rachel Reeves to announce in October last year that it would be abolished from April 2025.
During the World Economic Forum in Davos, Reeves announced that the government will soon present an amendment to the finance bill, increasing the leniency of the rule allowing non-residents to bring money into the UK without paying significant taxes.
"We have listened to concerns raised by the non-resident community," Reeves said in an interview with "The Wall Street Journal".
Tax changes in the United Kingdom
Reeves also assured that the changes will not affect the double taxation avoidance agreements made between the UK and other countries. "We do not intend to change these agreements," she added.
In a statement to CNBC, a spokesperson for the Treasury said the changes aim to encourage non-residents to bring their funds to the UK, which will stimulate spending and investment in the country.
"We do not expect these changes to affect the £35 billion in tax revenues that the OBR (Office for Budget Responsibility) forecasts over five years," it was added.
Critics have warned that alterations to the controversial system could trigger a significant outflow of the wealthiest individuals who are key to the government's pro-investment agenda. According to data from New World Wealth and consultants Henley & Partners, approximately 10,800 millionaires left the UK last year, an increase of 157% compared to 2023.
