The UK is poised to undergo one of the most extensive tax overhauls in recent history. With significant changes on the horizon, including a shift from the long-standing domicile-based tax system to one based solely on residence, and potential increases in Capital Gains Tax (CGT) rates, the implications for high-net-worth (HNW) individuals and the broader economy could be profound.

Abandoning the Domicile-Based System

For decades, the UK’s tax regime has relied on both domicile and residence status. However, the proposed move to a system exclusively based on residence marks a monumental shift. The government’s repeated failure to rule out raising CGT or Inheritance Tax (IHT) suggests that tax hikes may be imminent, with announcements likely at the Autumn Statement on 30 October 2024. The government’s need to raise revenue is no secret, and while the abolishment of the non-dom regime is an obvious choice, the broader economic impact remains uncertain.

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