The taxation of foreign domiciliaries from April 2025

Reforming the current regime - risks and proposals

by Oliver Marre

It will be well known by most readers that it has been a key plank of Labour's electoral campaign to abolish the link between domicile and UK taxation. The specifics have never been made public and, at the time of writing, we await their manifesto to see whether it contains any further detail. In some ways, such a reform makes sense. The link between tax and domicile is a historic hangover. But the current regime works, is well understood, and brings significant economic benefits. It has been reformed (most notably in 2008 and 2017) to restrict benefits for long-term residents and those previous reforms were designed to increase the tax paid by foreign domiciliaries while retaining the attractive nature of the UK as a place to come to live and to establish a business. If it is going to be reformed, any replacement regime should build on these benefits of the current landscape and not jettison them. That view should not be controversial.