Labour pledges to scrap non-dom tax break

The Labour party has promised to scrap the non-dom status used by rich individuals to cut their tax bills if it gets into power. Labour’s shadow chancellor, Rachel Reeves, said: “As the Tories raise taxes on working people, it simply isn’t right that those at the top can benefit from outdated non-dom tax perks. With Labour, people who make the UK their home will contribute to this country by paying tax on their global income.” Labour would replace non-dom tax status with a mechanism similar to those in Germany or Canada which also allows temporary residents to avoid domestic tax on overseas earnings. The party also announced that it will review the use of trusts hidden offshore and in tax havens to avoid paying tax in the UK. Rules allow those non-doms who create a trust before their status lapses to continue to benefit from the tax break via that trust once the 15-year limit is reached – part of the reason for Labour’s review of trusts. The move comes after weeks of tension over the use of non-dom status by the Chancellor’s wife, Akshata Murty, and questions over Rishi Sunak’s use of offshore trusts.

The Independent

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