Mortgages.scot

Non-dom tax status refers to people who are residents of the UK but are not domiciled in the UK. To make that easier, they live in the UK but do not consider the UK their permanent home. It's a way for people to avoid taxes.

What does that mean for non-dom people today?

Someone could be considered a resident in Monaco but live in the UK. This means they can keep all their income and wealth in Monaco, paying no tax. They will then only pay tax in the UK on income earned or brought into the UK. So, they only bring what they need to the UK to minimise their tax.

A good example was the wife of the current Prime Minister, Rishi Sunak. His wife was considered non-dom; she lived in the UK but considered herself a resident of India. She has since given this up.

What does the change mean for non-dom people

For all new arrivals to the UK, people will still benefit from their current non-dom status, but only for four years. After four years in the UK, they must pay tax on foreign income and gains, just as you or I would.

Why is this relevant to mortgages?

It may impact people coming to the UK. It's a favourite location for many across the globe. They come with children to educate them. For example, while they pay less tax, they still spend much money. This may deter them from considering the UK and looking at other countries.

I am all for everyone paying their way, but I am also all for wealthy people coming to the UK to buy the property and spend money to benefit the economy. Time will tell what the impact is. Remember, they chose to go to the UK and are wealthy; they don't have to come to the UK. If they choose not to come to the UK because of this, we will lose all they have to offer, not just the tax.