Tax breaks for non-doms abolished by Chancellor

Chancellor Jeremy Hunt has abolished non-dom tax breaks in his Budget, saying those with the "broadest shoulders" would pay more.

Non-doms are foreign nationals who do not pay UK tax on money made overseas, only on UK earnings.

Labour has long called for the move and said they would use the money on the NHS and schools.

Mr Hunt announced the system would change from April 2025 and would raise £2.7bn.

He said from 2025, new arrivals to the UK would not pay any tax on foreign income and gains for their first four years of UK residency, but after that, those who continue to live in the UK will pay the same tax as other UK residents.

He told MPs there would be "transitional arrangements" for those benefitting from the current regime.

Acknowledging that shadow chancellor Rachel Reeves promised to end the "outdated tax perks" in 2022, Mr Hunt claimed they had themselves copied a former Conservative chancellor.

"Nigel Lawson wanted to end the non-dom regime in his great tax reforming budget of 1988 which is where I suspect the Labour party got the idea from," he said.

"So the government will abolish the current tax system for non-doms, get rid of the outdated concept of domicile and the remittance basis in the tax system, and replace it with a modern, simpler and fairer residency-based system."

The Chancellor said there would also be a two year period where non-doms would be "encouraged to bring wealth earned overseas to the UK where it can be spent and invested here", which he claimed would generate more than £1bn of tax and "an additional £15bn of foreign income".