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Reeves’ Non-Dom Tax Reform Faces Revenue Shortfall and Wealth Exodus Risks

New analysis warns UK Treasury may see significantly reduced gains or multi-billion-pound losses as wealthy individuals leave following the abolition of non-dom status.

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Overview

  • The Centre for Economics and Business Research (CEBR) estimates the non-dom tax changes could yield only £2.5 billion in the first year, far below the Budget Responsibility's £10.3 billion forecast.
  • CEBR projects losses of up to £12.2 billion over the parliamentary term if half of the UK’s non-doms leave due to the reforms.
  • Data shows over 10,800 millionaires left the UK in 2024, more than double the previous year, with high-profile figures like Richard Gnodde and Nassef Sawiris relocating to tax-favorable jurisdictions.
  • The Treasury disputes CEBR’s findings, maintaining that the reforms will raise £33.8 billion over five years and ensure long-term residents pay their fair share of taxes.
  • Critics, including non-dom billionaire Dr. Ann Kaplan Mulholland, warn the changes could harm the economy, citing risks of recession and reduced investment from wealthy individuals.