International law firm Withers has made a number of recommendations to modernise and improve the UK's non-dom regime.
The proposed measures are backed by research conducted by the firm which suggests that, whilst the current system is not fit for purpose, there are a number of advantages in reforming it rather than scrapping it entirely, the firm said in a statement on 14 December.
Withers' six key recommendations for change are:
1. Qualification - Opening the new regime to anyone who has not lived in the UK for the past 10 years, rather than relying on the historic and complex concept of domicile.
2. A higher flat fee - Charging a £100k annual fee which is competitive in comparison with other international regimes and moves away from the current complexity of the rules.
3. Encouraging investment in the UK - Changing the rules to remove any obstacles for bringing money into the UK to invest in businesses.
4. Aligning with the visa system - Matching the regime with the UK's investor visa policy to attract talented and entrepreneurial individuals and their families.
5. Time limits - Setting a 15 year limit to non-dom status, providing clarity for those who choose to remain longer term.
6. Managing the transition - Avoiding mass flight of existing non-doms by offering a measured transfer into the new regime.
Withers' research and reform recommendations come as non-doms prepare for potential changes to the regime after the next UK election, expected in late 2024. Labour has promised to scrap non-dom status entirely if it wins the election, whilst the Conservatives are under pressure to review the regime rules.
Christopher Groves, partner in Withers' Private Client and Tax team, said: "Does the current non-dom regime do enough to attract talented, entrepreneurial people to the UK? By any reasonable view, the answer is no.
"The whole system is ripe for an upgrade and our recommendations would make the UK a competitive, appealing destination for globally mobile families. This is supported by our research, in which we have spoken to representatives of those families and their advisors to get a first-hand view of where the current rules fail them and the factors that matter to them when considering relocating."
Withers' in-depth research report into the needs of non-doms and the limitations of the non-dom regime can be accessed here.