Jeremy Hunt considers scrapping ‘non dom’ tax loophole for super-rich in U-turn

Jeremy Hunt is contemplating scrapping or scaling again the “non-dom” tax loophole for super-rich UK residents in a serious U-turn.

Labour pledged to abolish the measure two years in the past after it was revealed Rishi Sunak’s non-dom spouse Akshata Murty might have saved hundreds of thousands. The Chancellor has beforehand described scrapping the standing because the “wrong thing to do” and advised wealthy foreigners might depart the UK.

“These are foreigners who could live easily in Ireland, France, Portugal, Spain,” he told the BBC in 2022. “They all have these schemes. All things being equal, I would rather they stayed here and spent their money here.”

But Mr Hunt is now looking at the option as he desperately searches for extra cash to fund general tax cuts at his pre-election Budget. The loophole allows a UK resident whose permanent home, or domicile, is outside of Britain, to avoid paying UK tax on overseas income and potentially save millions.

Poaching the policy from Labour and targeting the non-dom status, which benefits around 70,000 wealthy individuals, could raise around £3billion. It is understood Mr Hunt will make a final decision after receiving the economic forecasts from the Office for Budget Responsibility on Friday.

Labour has already earmarked the funds for key pledges, including millions more NHS appointments and scans to clear the record backlog. A Labour source said: “We will wait and see whether the Chancellor manages to get this past Rishi Sunak given his family finances.”

The Chancellor can be mentioned to be contemplating a squeeze on public spending to be able to appease Tory MPs and ship tax cuts on the Budget subsequent week. But simply weeks in the past official figures confirmed the UK economic system had plunged into recession.

Shadow Chancellor Rachel Reeves mentioned on Wednesday Labour would inherit the worst financial scenario of any incoming authorities “for the reason that Second World War” if the party wins power.

Highlighting “debt curiosity funds, progress, dwelling requirements and taxation” she accused the Tories of “burning the entire home down”. She said: “George Osborne mentioned in 2010 that they had been going to repair the roof. What they’ve finished is smash the home windows, damaged the door down and are burning the entire home down.”