The Non-Dom Exodus

Non-Doms

A notable shift is taking place, with the UK’s tax landscape entering a period of considerable change. In recent weeks, a significant number of the UK’s non-domiciled individuals (“non-doms”) have left, following ongoing policy changes. For many more, the decision to stay or go now hinges on uncertain tax rules, conflicting forecasts, and increasingly aggressive scrutiny from HMRC.
The numbers only tell part of the story because underneath lies a more profound truth. Wealthy individuals, business owners, and international mobile families no longer feel confident that the UK values their contribution or will safeguard their assets in the future.

In this shifting environment, the need for clear, actionable, and forward-looking financial advice has never been more urgent.

A policy built on assumptions

According to former Treasury economist Chris Walker, the government’s recent decision to abolish non-dom status was built on “overly optimistic and incomplete” data. Walker’s analysis challenges the backbone of Labour’s fiscal plan: a Warwick University paper that claimed only 0.36% of non-doms would leave the UK while projecting £3.2bn in annual tax revenue gains.

In reality, these numbers are already unravelling, although it is debatable whether we are at the point of no return. That said, it is estimated that more than one in ten non-doms have already left the UK, with many others understood to be preparing their exit, quietly, through boardroom decisions and private client discussions

Walker’s critique is damning, claiming the Warwick study excluded those most likely to leave:

New arrivals
Globally mobile entrepreneurs
Foreign nationals with minimal family or business ties to the UK.

These are not just footnotes in the non-dom picture; they represent a significant portion of the country’s high-value taxpayers.

Behavioural economics: The misstep at the heart of reform

Policymakers often underestimate behavioural triggers in tax planning. Yes, most non-doms take advice to manage their liabilities, and many accept this as a trade-off for UK life, services, and stability. But they won’t accept ongoing uncertainty, especially when paired with unpredictability, heavy-handed bureaucracy, and potential reputational risk.

Many believe the UK’s move to abruptly abolish non-dom status – while underplaying its fiscal and legal consequences – has introduced a degree of uncertainty. Consequently, a growing number of international investors feel less assured about their long-term position in the country..

Walker describes this as “a leap of faith” rather than sound policy. Many would agree, and we’ve seen it firsthand in recent months as clients, some of whom have contributed millions in taxes annually, consider Switzerland, Italy, the UAE, and Singapore viable alternatives.

Global tax changes: Other countries are playing to win

This is not just a UK story; it’s a global game of strategy, and the UK’s position appears increasingly cautious.

While British policymakers are seemingly closing the door, other countries are taking a more proactive approach (although the generosity of some earlier schemes has been reduced). For example:-

Italy offers a simplified flat-tax regime for new residents on foreign income.
Portugal’s generous tax scheme has been replaced with a more limited version.
Greece provides targeted tax incentives but not broad income tax holidays.
The UAE remains tax-free on personal income and inheritance.
France is gradually reforming inheritance rules to attract global investors.

Tax competition is no longer an abstract theory; it’s a strategic advantage. And the UK, once the gold standard for attracting global talent and wealth, risks becoming a cautionary tale.

For non-doms and HNW families, the ground has shifted

The practical implications for many of our clients are vast. What was once a long-term strategy built around UK-based living, investment, and succession planning now feels fragile.

Some of the issues that now demand urgent attention include:

1. Domicile and residency re-evaluation

Understanding your legal domicile is no longer optional. Even long-standing residents need clarity, particularly if they are near key tax thresholds (such as 15 years’ UK residence under old rules or 10 of the past 20 years under proposed new ones).

2. Worldwide IHT exposure

The move to impose UK inheritance tax on worldwide assets is a game-changer. If you’ve been here 10 out of 20 years, your global estate could become taxable, even if most of your wealth is held abroad or in trusts.

3. Double taxation risk

Many countries don’t recognise UK-style estate or gift taxes, meaning individuals could face taxation at both ends unless appropriately structured. Our team frequently liaises with international tax offices to clarify treaty-based reliefs and reduce risk.

4. Asset repositioning

Clients with offshore trusts, foreign property portfolios, or corporate holdings must re-evaluate how they’re held and reported. Strategies like Family Investment Companies (FICs), LLPs, or offshore wrappers should now be reviewed with new rules in mind.

5. Pension and legacy planning

As outlined in our piece on The Double Tax Trap, changes to IHT treatment of pensions could impact how beneficiaries inherit wealth, especially where large SIPP balances or QROPS schemes are involved.

Walker’s recommendations: Why they matter now

Walker offered several reasonable suggestions to mitigate the damage, including:

Extending the Temporary Repatriation Facility to four years.
Relaxing or clarifying the 10/20 year IHT rule.
Reinstating Transfer of Assets Abroad (ToAA) protections to avoid punitive double taxation on overseas income.

While these haven’t been adopted, they serve as a potential policy blueprint, and clients should plan for both scenarios: reform and full enforcement.

Precision in uncertainty

We’ve worked with clients navigating complex tax changes for decades, including the introduction of DOTAS, remittance basis reforms, and post-Brexit residency recalibrations. Here’s what we do differently:

Strategic clarity

We don’t just advise, we model multiple scenarios to see where you stand. What happens if you stay? What if you go? What if the rules change again in 2026? You’ll know all your options in detail.

Cross-border expertise

Our team specialises in double taxation treaties, international disclosures, and offshore coordination – not just compliance, but strategic positioning.

Asset structuring

From FICs and LLPs to multi-jurisdictional trust reviews, we help clients ring-fence risk while maintaining flexibility. We do not offer off-the-shelf solutions; instead, we prefer to take a tailored approach.

HMRC navigation

We provide representation, defence, and mediation if you face questions or audits. If you are facing questions or audits, rest assured, we’ve helped many clients reduce exposure, avoid penalties, and successfully challenge rulings. With more and more solutions involving offshore-related disputes.

Final thought: This isn’t just about tax

At Wilkins Southworth, we understand that financial planning is never just about numbers. It’s about control, peace of mind, legacy, and the ability to look ahead confidently.

These changes are not only fiscal – they may signal a broader shift in the UK’s approach to international tax policy. The clients who recognise this now will emerge strongest and better prepared in the years ahead.

So, whether you plan to stay or explore other jurisdictions, we’re here to guide you confidently, discreetly, and effectively through every scenario. Feel free to give one of the team a call, and we can discuss your situation and options in more detail.