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Basically, “non doms” are UK residents whose permanent home, or domicile, is considered to be outside the UK for tax purposes.

For years, the Labour Party has vowed to scrap non-dom status, saying it could raise more than £3bn a year, while the Conservatives have, over recent decades, kept the tax break in law. 

However, Jeremy Hunt announced in his budget last week that the scheme, which helps some of the wealthiest people in the UK, would be abolished.

The chancellor said it would be replaced with a “modern, fairer and simpler residence system”.

There will still be a four-year reprieve for foreign citizens living in the UK – but not thereafter.

He said this would raise £2.7bn a year.

What are the current rules?

A non-dom only pays tax on money earned in the UK.

To avoid UK taxation on foreign income, they can pay an annual fixed charge. 

These are:

• £30,000 for those who have lived in the UK for at least seven of the past nine tax years
• £60,000 for at least 12 of the previous 14 tax years 

After 15 years, UK taxes must be paid, though non-dom status could be reinstated if you move to another country for a time, then return to the UK.

British citizens can be a nom-dom but only if they have links to another country – this includes those who have chosen to leave the UK to live abroad indefinitely. 

The exemption usually applies to people born abroad, or those whose father is from a different country. 

The prime minister’s wife

Rishi Sunak’s wife, Akshata Murty, is one of this most high-profile nom-doms. 

However, after being criticised in 2022, she agreed to pay UK taxes on all her earnings.

The London School of Economics found a non-dom saves more than £125,000 a year on tax, on average. 

How many nom-doms are in the country? 

According to latest HMRC data, there were 68,800 non-doms in the UK in 2022. 

In that year, they paid £8.5bn in income, capital gains and employment taxes. 

The number of people claiming non-dom status has fallen over the past 10 years after a change in rules stopped people using the benefit permanently. 

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