UK's Farage promises non-doms protection from tax on overseas assets

Nigel Farage’s Reform UK party is offering non-doms full exemption from tax on their overseas assets for a fee of £250,000 ($335,000) every 10 years with the revenue redistributed to lower income workers, drawing a new battle line with Britain’s traditional parties.

Farage’s proposal pits him against both the Conservatives, which last year abolished non-dom status for those who live in Britain but have their permanent home abroad, and the Labour government, which went one step further after winning the election last July by imposing inheritance tax on their global wealth.

Thousands of people in Britain have left in protest at Labour’s inheritance tax measure, including some of the country’s wealthiest individuals. Chancellor of the Exchequer Rachel Reeves is now exploring changes to bring them back. Inheritance tax is charged at 40% in the UK, one of the highest rates in the developed world.

Farage would reinstate the old non-dom regime that protected them from tax on their overseas income, including inheritance tax, to reverse the exodus of the rich and business elite. Under Reform’s so-called “Britannia Card,” non-doms would have to pay the £250,000 fee. The Times first reported the story.

Proceeds from the levy would be transferred directly into the bank accounts of the lowest-earning 10% of workers. Reform estimated about 2.5 million people on a full-time salary of less than £23,000 would get £600 each if 6,000 non-doms paid for the Britannia Card.

Reform has become a credible threat to Britain’s traditional two party system. It is leading in the polls and Farage is developing a more coherent policy agenda than with his former UKIP and Brexit parties, when he led largely single issue campaigns against the European Union. Critics warn that his plans for big tax cuts on working people paid for by slashing the size of the state could prove undeliverable.

Reform’s £250,000 “landing fee” is a little cheaper than the former non-dom regime under which there was an annual fixed charge of £30,000 if an individual lived in the UK for seven of the last nine tax years, rising to £60,000 if it was 12 of the last 14 tax years. Restoring the non-dom status would also cost Reform the £33.8 billion of income that the Office for Budget Responsibility estimated the Conservative and Labour changes will generate over this parliament.

Companies House data compiled by Bloomberg found evidence of an exodus of more than 4,400 directors of UK businesses since last July. In April alone, when the tax hikes kicked in, departures were up about 75% from 12 months earlier.