It's Business As Usual For UK's Non-Dom Regime Despite Slip

Paul Fairbairn, 20 August 2020


The death of the UK’s non-domiciled system has been greatly exaggerated, so the authors of this article claim. Recent figures highlighted a slip in the number of non-doms, but the total – 78,000 – is still substantial. How will the non-dom system flourish in the future?

A few days ago official figures showed that the number of non-domiciled UK residents slipped to 78,000 in the 2018/19 financial year from 78,700 a year before. Such figures highlight how the non-dom population has contracted as a result of a series of changes to the system, with the combined impact of making the status less attractive. 

In future, will the non-dom regime continue to be a useful one? Let’s not forget that other countries, such as Italy, have sought to introduce rival systems. 

Paul Fairbairn, partner in the private client team of law firm Cripps Pemberton Greenish, discusses the system and what the future may hold. The editors are pleased to share these views; the usual disclaimers apply. To enter the conversation, email and (We are also running this item on our Asia platform because we know that readers in the region follow this matter closely.)


On 30 July, HMRC released its statistics for the tax year 2018/19 on non-domiciled taxpayers in the UK, colloquially known as non-doms. As ever, statistics can be viewed in many ways but presently they seem to support my own experience: there has been no drastic change and for the time being it is business as usual.  

The “stats”
The headline figure is that there were 700 fewer non-doms than last year; with 78,000 down from 78,700 in the tax year 2017/18. Hardly the mass exodus talked up in some circles since the announcement of the overhaul of the tax rules for non-doms introduced in 2017. It is also worth noting that these figures, although released now, only relate to the tax year that ended in April 2019 so we have a year’s lag. The impact, if any, of the various Brexit deadlines we have missed, or are quietly approaching, is yet to be seen.  

A more interesting fact for me is that HMRC estimates that 2018/19’s smaller number of non-dom taxpayers contributed £250 million ($329.3 million) more to the exchequer than the greater number the year before; £7.83 billion in UK income tax, capital gains tax and National Insurance contributions up from £7.57 billion. Evidence, if any more were needed, of their substantial contribution to the economy and the government’s bank balance.  

The report is not as complete as it has been in past years and some key statistics are missing. This year there is no figure for the proportion of these 78,000 non-doms who actually claim the remittance basis and make use of the tax benefits available to them. If, when we talk of non-doms, we mean those high net worth individuals claiming a favourable tax regime, this is the number that really matters. In the previous two tax years this has remained constant at about 58 per cent or, in other words, only 45,700 last year. It is also worth noting that there will be hundreds of thousands of others in the UK who are not high net worth but are technically non-doms who do not feature in these statistics as they do not file tax returns but still pay taxes via PAYE.  

When the rules changed on 6 April 2017 the annual statistics showed a sharp drop in their number.  However HMRC, not unreasonably, pointed out that this was not due to departures but because anyone who had been a UK resident for 15 years or more no longer qualified as a non-dom. The statistics seem to suggest that actually there has not been a great change in the number of non-doms coming and going, simply a moving of the statistical goalposts.  

In any one year, perhaps as many as 1/15th of all non-doms will now cease to qualify as such, meaning that a similar number must be arriving if the numbers remain constant. Even then, this does not mean that those ceasing to qualify have left the UK, they are now just treated as UK domiciled taxpayers. The extent to which these, originally non-dom, taxpayers continue to contribute to the economy is not shown but should be understood.  

Our experience 
As a tax lawyer advising non-doms in and around London, these statistics do not surprise me and back up my impression that little has really changed. I have continued, even during lockdown, to advise new non-doms planning a move to the UK as well as those wanting to understand the implications of leaving the UK or staying longer term.  

Most of those I have advised on leaving the UK have been Europeans returning home.  No doubt Brexit has a part in that, but for the most part I sense that this was secondary. For those leaving the UK, the main factors motivating their departure are life events, such as children’s education or job opportunities elsewhere, but not tax concerns. Crucially, much of our advice focusses on how to make the most of the other rules introduced in 2017, designed to encourage non-doms to stay long term by effectively enabling them to retain tax benefits beyond 15 years when they are no longer deemed non-doms.  

When it comes to advising clients on arrival, the greatest influx has been from Hong Kong, although consistently the US as well. My partners in our London prime residential property team have remained busy and on a straw poll confirmed that, at least prior to the pandemic, non-doms have continued to make up a core proportion of their buying clients.  

The anecdotal evidence from these clients moving to the UK seems to back up the statistics. The UK, and particularly London, remains a very attractive place to live and work. Although we have our own very uncertain times, courtesy of Brexit and COVID-19, much of the world is grappling with even greater uncertainty. 

The regime for non-doms continues to be comparatively appealing and the statistics suggest that in spite of all of the changes in recent years they have continued to contribute the same if not more to the UK economy. Given the current global crisis and restrictions on movement, the statistics published two years hence could show a very different picture, what that will be is anyone’s guess. 

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