The Labour Party issued their 2024 Manifesto on 13 June, which includes references to the future taxation of non-domiciles (non-doms) and related trust structures.

There’s no surprise – it makes clear that the UK’s tax regime for non-doms will change, replaced by a “modern scheme for people genuinely in the country for a short period”. Most commentators expected the majority of the 2024 Spring Budget proposals put forward by the current Government to be adopted by the Labour Party, with perhaps some tweaks.

However, there are some firm commitments made in the Labour Manifesto, which were previously announced, but are now written down as commitments:

• Labour will not introduce the proposed 50% discount for ‘foreign income’ in 2025/26; and
• Most significantly, Labour will be bringing offshore trusts within the scope of Inheritance Tax (IHT) against current practice and the 2024 Spring Budget proposals.

It was the second of these that had caused most concern to many of the country’s wealthiest non-doms, who immediately began to seriously consider bringing forward their departure from the UK. However, depending on how the new rules are drafted, even leaving now may not prevent exposure to IHT for non-doms and their trusts, regardless of how closely linked to the UK they are.

For those who may be affected, our two articles for individuals and for those with offshore trust structures are now even more important than before (if that’s possible), especially for the trustees of potentially affected trust structures.

For further advice, please contact James Walker, Private Client Partner.