The number of people claiming non-domiciled or deemed domiciled tax status in the UK has seen a significant decline in the final year of the regime. According to figures published by HM Revenue and Customs, the number of individuals claiming non-domiciled status fell by around 1,200 to 81,900, while their combined tax and National Insurance liabilities rose 9 per cent to £13.6 billion.
The data covers the tax year ending 5 April 2025, the last before the remittance basis of taxation was replaced on 6 April 2025 with a system based on residence. HMRC said the release is for tax year ending 2025, which occurred prior to policy changes being implemented.
The number of individuals claiming non-domiciled status fell by around 400 to 73,400, a decrease of 0.5 per cent on the previous year. Deemed domiciled taxpayers, formerly non-doms who are treated as UK-domiciled for income and capital gains tax after long residence, fell by around 800 to 8,500.
Both inflows and outflows slowed dramatically. HMRC recorded around 8,600 newly arrived non-domiciled taxpayers, down from 10,000, and around 9,000 leaving the non-domiciled population, down from 11,200.
Income tax accounted for close to three-quarters of the £13.6 billion total and reached its highest level since the tax year ending 2017. Capital gains tax liabilities across the combined group rose 58 per cent, which HMRC said was consistent with wider increases in CGT receipts ahead of the Autumn Budget 2024.
The release also covers Business Investment Relief, which allows remittances to be brought into the UK free of tax when invested in trading companies. Around 400 individuals claimed the relief in the tax year ending 2024, investing £1.7 billion in UK businesses, an increase of £679 million on the previous year and the highest figure in the series.
HMRC said this is the final publication of the statistics in their current form, with a further update including detailed breakdowns due in 2027. The government has said accurate estimates of how many people have left since the regime changed will not be available until next year.
Under the replacement rules, new arrivals are exempt from UK tax on foreign income and gains for their first four years of residence, after which they are taxed as other UK residents, and assets held overseas are brought within the scope of inheritance tax.
The figures have landed in a continuing dispute over the fiscal risk of relying on a small group of taxpayers. A recent Freedom of Information request found the top 1 per cent of taxpayers paid £93.8 billion in 2023/24, or 33 per cent of income tax and CGT receipts. "A very small group of individuals is responsible for a disproportionately large share of the nation's tax revenue," said the founder and chief executive of a firm.
The Treasury has responded to the findings, stating that the UK's tax system is progressive, meaning those with higher incomes contribute more, helping to support vital public services.
Prime Minister Andy Burnham has declined to rule out a levy on the assets of the wealthiest, telling a podcast that people may eventually be asked for "a little more". Nigel Green, chief executive of a financial services firm, has urged him to rule out a wealth tax, saying: "A wealth tax that has not been proposed is already doing damage."
The Office for Budget Responsibility forecast in March that the tax burden would reach 36.3 per cent of GDP in 2025-26, rising to 38.5 per cent by 2030-31, the highest level since records began in 1948.
Other jurisdictions have been competing for the same taxpayers, with government agencies and law firms from countries including Italy, Abu Dhabi, and Cyprus holding events in London aimed at persuading internationally mobile individuals to relocate.
London accounted for 57 per cent of non-domiciled taxpayers and 73 per cent of their income tax, CGT and NICs liabilities in the tax year ending 2024, HMRC said.
