George Osborne rose to his feet on Wednesday to deliver a budget packed with surprises from cutting tax credits to introducing a new National Living Wage.
One of the most eye catching measures announced was a sweeping change to rules surrounding non-doms. While the Chancellor stopped short of completely abolishing the non-dom tax status, the rule change will results in an extra £1.5 billion in tax revenue flowing into the Treasury from when the new rules come into force in 2 years’ time.
Currently non-dom status can be passed on from father to son but this anomaly is set to end. The moves are in response to Labour’s pledge during the election campaign to abolish the tax break within a year of taking office.
This is just one more aspect of a budget which many see as an attempt by Osborne to appropriate some of Labour’s more popular policy positions.
Over 100 000 Brits currently enjoy non-dom tax status despite many of them spending almost all of their time in the UK.
Mr Osborne said that many non-doms “make a considerable contribution to our public life and tax revenues”. Before adding, “There are some fundamental unfairnesses in the non-dom regime. It is not fair that people live in this country for very long periods of their lives, benefit from our public services and yet operate under different tax rules from everyone else.
“Non-dom status was meant to be temporary but it became permanent for some people. Not any longer.”