UK’s Tax Raid on Foreign Wealth: Implications for Investors and Entrepreneurs in Oman

• By Reuters.
• September 27, 2024July 25, 2025
• non-dom tax tax reform UK government
• With 0 comments

LONDON: The Labour government in Britain is reevaluating aspects of its proposed changes to tax regulations concerning wealthy foreigners, commonly referred to as the non-dom tax, according to media reports released on Friday.

After coming to power in July, Prime Minister Keir Starmer’s Labour Party pledged to rebuild the nation and indicated plans to increase taxes on the wealthiest citizens to fund public services and infrastructure.

The current non-dom tax system allows individuals residing in Britain to pay minimal or no tax on income earned overseas. This arrangement has been contentious for years, with previous Conservative administrations also seeking to tighten these rules.

The Labour Party intends to extend the inheritance tax system to encompass foreign assets held within trusts designed to circumvent such taxes.

However, the Financial Times reported that Finance Minister Rachel Reeves is reconsidering these proposals, citing concerns that they may not generate the intended revenue. As of now, no final decisions have been made.

Financial institutions and advisors for high-net-worth individuals have expressed that some clients with non-dom status might leave the UK if these changes are implemented.

A Treasury spokesperson characterized the media reports as speculative, emphasizing that the Office for Budget Responsibility, the nation’s fiscal watchdog, will verify all financial estimates in the budget due on October 30.

"We are committed to addressing inequities in the tax system to enhance revenue for public services," the spokesperson stated. "This is why we plan to eliminate the outdated non-dom tax regime and introduce a new internationally competitive residence-based framework aimed at attracting top talent and investment to the UK."

Special Analysis by Omanet | Navigate Oman’s Market

The UK Labour Party’s potential rethinking of the non-dom tax legislation presents both opportunities and risks for businesses in Oman, particularly those engaged in international trade and investment. As wealthy expatriates may reconsider their residency in the UK, Oman could attract high-net-worth individuals seeking favorable financial frameworks, creating avenues for luxury markets and investments. Smart investors should be ready to leverage this potential influx by enhancing Oman’s appeal as a stable, tax-friendly environment for wealth management and business operations.