Rachel Reeves has changed her stance on tax rules for non-domiciled residents after what sources describe as “intense lobbying.” Non-doms, often wealthy individuals who avoid paying UK tax on overseas income, will now benefit from a softer approach in the finance bill.
What Changed for Non-Doms?
The policy shift focuses on the “temporary repatriation facility.” This scheme lets non-doms bring funds to the UK without steep tax charges. Originally, ex-chancellor Jeremy Hunt introduced it with tighter rules. Now, certain investment funds will be included.
- Tax Rates: Non-doms pay 12% tax on incoming income for the first two years, and 15% in the third year.
- Why So Controversial? Critics claim it rewards the super-rich at a time when many face rising living costs.
A “Tweak” to the Finance Bill
Business Secretary Jonathan Reynolds confirmed the adjusted policy at the World Economic Forum in Davos. He told reporters it was important to reduce uncertainty and assure investors that the UK welcomes their money. Reeves also stated that, in her view, growth must trump other concerns, suggesting a more lenient approach to big earners.
Critics See a Reverse
Opponents, however, say Reeves’ move betrays promises to ensure tax fairness. They argue it weakens the government’s position on reducing inequality. Many also question whether this tweak will truly boost growth or just benefit a privileged few.
What’s Next?
Despite the backlash, these changes appear set to pass. Non-doms and their advisers are celebrating a victory. Others remain worried about the impact on public finances and social trust.
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