UK aims to scoop £1bn in non-dom crackdown

Thursday 23 March 2017

The UK believes it could earn £1.35bn over the next five years by cracking down on people who spend some of their time in the UK, but are domiciled elsewhere, such as Jersey.

Announced in Chancellor Philip Hammond’s Annual Budget, the earnings will be the result of the UK government’s efforts to tighten up the rules on so-called ‘non-doms’ - Jersey Finance have responded by saying they don't believe the effect on the Island's finance industry will be significant.

The £1.35 billion figure represents a £40 million increase from 2016’s estimates from 2018 to 2012.

Pictured: The announcement came in UK Chancellor Philip Hammond's Annual Budget.

While the end of the permanent status was announced in 2015, the reforms will come into full force this year when those who have resided in the UK for 15 of the past 20 years will have to start paying taxes on income and capital gains.

The move will also have an impact on inheritance tax on residential property, which could rake in an additional £275 million over the next half a decade.

Geoff Cook, CEO of Jersey Finance commented: 

“This is an expected and well-trailed move but the impact for Jersey and its finance industry, on balance, will probably not be that significant. Around 12% of the Island’s business relates to non-doms, with the emphasis of the trust and private wealth industry being predominantly focussed on non-tax related matters. That said, the UK is still committed to maintaining a non-dom regime and Jersey will undoubtedly remain a popular jurisdiction for non-doms to manage their wealth, irrespective of the changes.”