For fear of the flight of foreign millionaires Britain will “soften” the changes to the 200-year-old law

The Labor government planned to repeal the law that offered tax breaks for 15 years to foreign nationals who moved to the UK; However, according to the minister of finance, following concerns raised by foreign residents, it was decided to amend the law so that it would be “more generous”

Due to fears of millionaires leaving the country, the British Treasury announced that the British government will “soften” some of the planned changes to the 200-year-old law.

The existing ‘non-dom’ law allows foreign citizens who have moved to live in the UK not to pay taxes for 15 years on the capital they have accumulated outside the United Kingdom. In 2023, there were 74,000 people who benefited from this law, compared to 68,900 a year earlier. The Labor government promised during their election campaign to cancel the benefits included in the law, and last October it was decided to cancel them starting in April 2025.

The move drew criticism that it would cause millionaires to leave the UK. According to estimates by the New World Wealth firm, about 10,800 millionaires left Britain last year – a 157% jump compared to 2023.

The British Finance Minister, Rachel Reeves, said at an event held at the World Economic Summit in Davos, that “we have listened to the concerns raised by the community of foreign residents. Therefore, we will submit an amendment that makes the law more generous, and will allow foreigners to bring money into Britain without paying significant taxes.”

A spokesman for the British Treasury confirmed to CNBC that the changes are intended to encourage foreign residents to “bring their wealth to Britain, and to spend and invest their money here.” According to the spokesman, “we do not expect that these changes will affect the tax revenues of 33.8 billion pounds that the state expects to collect in the next five years from those foreign residents.”

The government’s measures from October in relation to foreign residents are part of a broader move in relation to the top deciles in the country, which included the imposition of new taxes on managers of private equity funds, private schools, owners of several houses and private jets.

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