A great deal has happened in the non-dom space since March 2024. With a General Election called for 4 July, we examine where things stand and what the incoming government is likely to do.

Labour's response to the Conservative proposals

Labour was swift to respond to the Budget announcements on non-dom reform. Notably, Labour did not object to the general direction of travel — shifting from a domicile-based to a residence-based system — but proposed several material adjustments, including stricter treatment of offshore trusts and the removal of the 50% first-year income allowance for those ineligible for the new foreign income and gains regime.

What the new regime is likely to look like

Based on what Labour has said publicly, the most likely outcome is a regime broadly along the lines announced in the Spring Budget, with some modifications. The key differences relate to trusts (which Labour proposes bringing within the scope of IHT once the settlor exceeds 10 years of UK residence), the first-year transitional relief, and the remittance facility.

The timing question

A formal announcement is expected in an Autumn Statement once Labour has formed a government and had time to prepare draft legislation. Introduction from April 2026 — rather than April 2025 — is now considered more likely, giving taxpayers adequate time to plan.

What to do now

Non-doms who claim the remittance basis, those concerned about their worldwide estate becoming subject to IHT, and UK-resident settlors of excluded property trusts would all be well advised to take preliminary advice and prepare contingency plans. The direction of change is clear, even if the precise detail is not yet settled.

Please contact Paul Davidoff or a member of the team if you would like to discuss your circumstances.