Have you heard of someone who has been granted a non-dom tax status but you’re not sure what it means?
A non-domiciled status allows foreign nationals who live in the UK, but are officially domiciled overseas, to avoid paying UK tax to the government on their overseas income or capital gains.
Those who have permanent homes outside of the UK only pay tax on the money they earn in the UK, explains the BBC.
However, this is unless they pay that money into a UK bank account.
Non-Dom Tax Status Explained
For wealthy individuals, it gives them an opportunity for “significant and entirely legal savings”, if they nominate a lower-tax country as their domicile.
Former Prime Minister Rishi Sunak’s wife Akshata Murty has previously enjoyed non-dom status.
Who qualifies for non-dom tax status?
There are two different ways someone can have a non-dom tax status, as reported by the BBC.
- Domicile of origin - if you were born in a different country from the UK, or if your father came from a different country
- Domicile of choice - if you are over 16 and choose to leave the UK and live indefinitely in another country
This Budget will help to get Britain working.
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It will pave the way for reforms that tackle the root causes of economic inactivity, so those who can work, will work.
Non-doms who choose not to pay tax in the UK on their overseas earnings, must pay:
- £30,000 if they’ve been here for at least seven of the previous nine tax years
- £60,000 for at least 12 of the previous 14 tax years
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- How could pensions and pensioners be impacted by the Budget
Back in 2017, non-dom rules were adjusted which meant this status could no longer be claimed if people have been a UK resident for 15 out of the previous 20 years, or if all the following apply:
- you were born in the UK
- your domicile of origin was in the UK
- you were resident in the UK for at least a year since 2017
Additionally, those who earn less than £2,000 a year from foreign earnings and who do not bring that money into the UK, don’t have to do anything.
More information about the non-dom status can be found on the UK government website.
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