Pre-Budget speculation has focused on the possible "scrapping" of non-dom status. Paul Davidoff examines what the government is likely to actually propose — and what it would mean in practice.

The most likely outcome is not the abolition of the remittance basis entirely, but a detachment of eligibility from domicile and its attachment to years of UK residence. This could mean, for example, that an individual who has been non-UK resident for a defined period may claim the remittance basis for up to a fixed number of years, followed by an annual charge.

There are also rumours of a move toward something more like the Italian system: an annual flat fee in exchange for tax-free treatment of non-UK income and gains. This would make HMRC's administration considerably simpler and might actually attract more wealth to the UK by offering greater certainty.

On inheritance tax, the most likely change is a shift to a residence-based test — bringing IHT eligibility in line with how most other jurisdictions operate and removing the somewhat anomalous role of domicile in the system.

Whatever is announced, any major changes are likely to take effect from April 2025 at the earliest. Non-doms who could be affected should take advice promptly once details are confirmed. Please contact Paul Davidoff or a member of the team.