Jeremy
Hunt
has
scrapped
the
controversial
“non-dom”
tax
status,
parking
the
government’s
political
tanks
on
the
Labour
Party’s
lawn
and
unleashing
the
next
wave
of
debate
over
how
the
UK’s
wealthiest
individuals
should
be
treated.
The
status,
which
permitted
individuals
living
in
the
UK
to
avoid
tax
on
their
earnings
abroad,
will
now
come
to
an
end
next
year
in
favour
of
a
“fairer”
and
“more
competitive”
option,
Hunt
told
MPs.
Though
the
headline
policy
will
come
into
effect
in
April
2025,
in
practice
it
will
only
take
effect
once
previously-eligible
individuals
have
lived
in
the
UK
for
four
years.
This
is,
practically
speaking,
a
huge
grace
period.
Non-dom
tax
status
has
been
a
political
battleground
for
years,
and
the
cause
of
some
discomfort
for
parties
who
have
taken
a
stance
on
it.
At
the
2015
election,
the
Labour
Party
committed
to
abolishing
it
under
its
then-leader
Ed
Miliband,
but
found
itself
publicly
embarrassed
when
its
then-shadow
chancellor
Ed
Balls
was
shown
earlier
footage
in
which
he
argued
the
policy
wouldn’t
bring
in
higher
tax
receipts.
Rishi
Sunak
has
also
faced
heat
on
this
issue
after
his
wife,
Akshata
Murty,
was
revealed
to
have
been
a
“non-dom”
in
2022.
Murty,
who
received
over
£11
million
from
her
stake
in
her
family’s
Indian
IT
services
company
Infosys,
was
shielded
from
tax
on
these
earnings.
Today,
Treasury
documents
published
alongside
the
Budget
argue
that
the
policy
will
generate £185
million
in
the
tax
year
2025/26,
before
revenue
rises
to £2.8
billion
in
2026/27, £3.6
billion
in
2027/28,
and £2.7
billion
in
2028/29.
However,
some
commentators
have
suggested
the
policy
will
ultimately
drive
wealthy
individuals
from
UK
shores.
This
is
in
line
with
the
opinion
of
the
Institute
for
Fiscal
Studies,
which
has
warned
the
chancellor
that
removing
the
status
could
see
many
of
the
37,000
people
claiming
it
exit
the
country.
The
Labour
Party
has
previously
said
that
Conservative
adoption
of
the
measure
would
amount
to
“abject
humiliation”
for
the
government.
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