Non-Dom numbers in UK may be dropping but an expected exodus is on hold as many 'wait and see', according to private client specialist Russell-Cooke.
Commenting on the 2018-2019 non-dom statistics, released today, Rebecca Fisher, partner in the private client team at Russell-Cooke says that although the figures released today by HMRC show a slight decrease on the previous year, as the figures represent a period of time in which the recent general election, Britain leaving the EU in January 2020 and Covid-19 had not yet played out.
"Those wanting to relocate because of the deemed domicile tax changes will have largely done so, and those that remain are likely taking a wait and see approach as the UK's future direction crystallises," he says.
"It remains to be seen what the long term outlook is for non-doms but almost certainly recent events and unprecedented [UK] government spending will require funding.
Fisher adds that increased taxation will be high on the [UK chancellor's] agenda which has already been hinted at, with recent months seeing renewed talk of the introduction of a wealth tax.
"Whether this will be the year for sweeping tax reforms will only be known in the Autumn when the chancellor delivers the Budget," she concluded.
Mike Hodges, partner in the private wealth team at Saffery Champness, believes that the "so-called flight of the non-doms "seems, so far, to remain a prediction rather than a reality.
"The effects of the 2017 reforms to the non-dom rules have clearly had an effect, but based on these figures it looks like those who were planning to leave as a result have likely already done so and it's therefore unsurprising that the relative flood of departures in previous years slowed to a trickle in 2018/19.
"Looking back over the last few months we have had a period of considerable uncertainty, with an election at the end of last year, four months of lockdown and a continuing lack of clarity over the impact of Brexit. Many may have been holding off on any significant decisions until there was greater certainty."
Hodges points that non-doms will be keeping "a watchful eye" on how the government's response to the covid-19 crisis evolves.
As the UK chancellor is on the look out for sources of revenue to bolster the coffers drained by the government's relief efforts his eye may turn to non-doms, particularly given the "persistent rumblings" about a wealth tax.
"Non-doms will likely be considered a safe target politically, but the Chancellor will need to be mindful to not throw the baby out with the bathwater with non-doms providing a significant source of investment in the UK economy - something which he will hope continues post-Brexit," Hodges added.
"Non-Dom claims for Business Investment Relief seemingly went off a cliff edge in 2017-18, almost halving in total, which could signal the start of a reluctance to invest in the UK that will need to managed, or replaced by alternative sources, going forward."