Wealth managers relieved as non-doms get off lightly

britain’s private wealth industry, servicing the colonies of rich foreigners living in the UK, was granted a boost after reforms of how their overseas money is taxed proved more benign than many had feared.

Chancellor George Osborne said people resident but not domiciled for tax purposes in the UK – known as non-doms – would have to pay more after living in Britain for 12 years.

Many had feared a significant hardening of the non-dom rules, potentially damaging the country’s burgeoning wealth management industry.

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Non-doms, who currently have to pay a £30,000 annual levy after seven years, will pay £50,000 after 12 years but will not pay tax on foreign income or capital gains remitted to the UK if it is invested in British business.

Many had warned of damage to a competitive advantage enjoyed by UK wealth managers, running money offshore for thousands of highly-paid foreign financiers working in the City and less economically active residents who use the country as a tax haven.

Mr Osborne said there would be “no other substantive changes” to the non-dom rules for the remainder of the current parliament.

Stephen Hall, a private client partner at Deloitte, said the changes “send out a message of intent, but the UK has still quite an advantageous tax system for the seriously wealthy”.

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