‘Non-dom’ tax breaks for rich people may be scrapped by Jeremy Hunt
Jeremy Hunt is considering ending or reducing “non-dom” tax breaks that allow wealthy individuals to live in the UK while their wealth is considered as residing overseas.
Sky News understands the measure is on a list of potential revenue raising measures being assessed ahead of next week’s budget, and could be enacted to give the chancellor room to cut universal taxes.
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The move, first reported by the Financial Times, could raise more than £3bn for the exchequer and would be politically eye-catching given Mr Hunt and successive Conservative governments have resisted calls to abandon it – arguing it makes the UK more attractive to foreign wealth creators.
It is also personally sensitive for the prime minister, whose wife Akshata Murty, daughter of the billionaire founder of the Indian software giant Infosys, previously benefited from non-dom status.
Read more:
What to expect in the budget – from tax cuts to vaping duty
Akshata Murty. Pic. Reuters
What does ‘non-dom’ mean?
“Non-dom” is short for “non-domiciled individual” and refers specifically to the tax status of a person who is a UK resident but whose permanent home is abroad.
Non-doms only have to pay tax on money earned in the UK, while their overseas income and wealth are not subject to UK tax – and they can benefit from the status for up to 15 years.
This allows wealthy individuals to make significant and entirely legal tax savings if they choose to be domiciled for tax purposes in a lower-tax jurisdiction.
Labour has long supported ditching non-dom status and has proposed cutting the duration of benefits to just four years in a concession to what they call genuinely temporary UK residents.
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‘We’ll only cut taxes in a responsible way’
Tories constrained by their own rules
That similar measures are now being considered by Mr Hunt demonstrates both the tightness of the public finances, and the political imperatives of an election year budget.
Mr Hunt is attempting to find money to fund personal tax cuts he and the prime minister believe are potential vote winners, but is constrained by his own fiscal rules, an arbitrary set of restraints intended to demonstrate responsible economic management.
These require that debt falls as a proportion of GDP in the fifth year of economic forecast prepared by the Office for Budget Responsibility (OBR).
These forecasts include a figure for headroom, the amount of “spare” cash notionally available to stay within the rules, and this effectively sets the chancellor’s room for manoeuvre.
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What is fiscal headroom?
The OBR prepares multiple forecasts in the run up to a budget, the most recent of which was delivered on Wednesday with the final version due to be handed over on Friday.
Other measures reportedly under consideration are a tax on vapes and cuts to departmental spending, though many economists believe these are already inevitable on the government’s current economic plans.
Adopting a popular Labour proposal that affects only the very richest would create a little more headroom and little controversy other than the charge of hypocrisy, but it might be a headache for the Opposition, who have said they will stick to the same fiscal rules.
With one of their few distinct revenue sources already used up, Conservative strategists believe Keir Starmer and Rachel Reeves would be forced to explain how they will raise money already committed to spending plans without raising the taxes Mr Hunt hopes to cut.
The Treasury declined to comment.
The US Securities and Exchange Commission and crypto exchange Gemini have asked to pause the regulator’s suit over the exchange’s Gemini Earn program, saying they want to discuss a potential resolution.
In an April 1 letter to New York federal court judge Edgardo Ramos, lawyers representing the SEC and Genesis requested a 60-day hold on the case and that all deadlines be pulled “to allow the parties to explore a potential resolution.”
“In this case, the parties submit that it is in each of their interests to stay this matter while they consider a potential resolution and agree that no party or non-party would be prejudiced by a stay,” the letter states.
The lawyers added that a stay was in the court’s interest as “a resolution would conserve judicial resources” and proposed that a joint status report be submitted within 60 days after the entry of the stay.
The SEC sued Gemini and crypto lending firm Genesis Global Capital in January 2023, alleging they offered unregistered securities through the Gemini Earn program.
In March 2024, Genesis agreed to pay $21 million to settle charges related to the lending program, but the enforcement case against Gemini remains outstanding.
Letter from SEC and Genesis Global requesting extension of stay. Source: CourtListener
The letter did not specify what a possible resolution would entail, but the SEC has dropped several lawsuits it launched against crypto companies under the Biden administration, including against Coinbase, Ripple and Kraken.
Related: Will new US SEC rules bring crypto companies onshore?
In February, Gemini said the SEC closed a separate investigation into the firm as the regulator winds back its crypto enforcement under President Donald Trump.
“The SEC cost us tens of millions of dollars in legal bills alone and hundreds of millions in lost productivity, creativity, and innovation. Of course, Gemini is not alone,” Gemini co-founder Cameron Winklevoss said at the time.
OpenSea, Crypto.com and Uniswap, among others, have also recently reported that the SEC had closed similar probes into their companies that were investigating alleged breaches of securities laws.
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Two Republicans who received a combined $1.5 million from the crypto-backed political action committee (PAC) Fairshake will enter the US House after winning special elections in Florida.
Republican Jimmy Patronis won the vacant seat in Florida’s 1st Congressional District to replace Matt Gaetz, taking 57% of the vote to defeat Democrat Gay Valimont, according to AP News data.
Randy Fine also took Florida’s 6th Congressional District with 56.7% of the vote to beat his Democratic rival, public school teacher Josh Weil, and fill a seat left vacant by Mike Waltz, who took a job as White House national security adviser.
Florida’s 1st and 6th Congressional Districts — located in Florida’s western panhandle and along the state’s northeast coast — have been controlled by Republicans for roughly 30 years, but their lead has narrowed in recent years.
Fairshake, a PAC backed by crypto industry giants including Coinbase, Ripple and Andreessen Horowitz, gave Fine around $1.16 million in advertising spending and funneled $347,000 to Patronis to support his campaign.
Both Republicans have expressed support for the crypto industry, with Fine stating in a Jan. 14 X post that “Floridians want crypto innovation!”
Source: Randy Fine
Fairshake and its affiliates poured around $170 million into the 2024 US presidential and congressional elections to back candidates who committed to supporting the crypto industry.
The wins by Patronis and Fine increased Republican representation in the House to 220 seats, with the Democrats holding 213 seats.
There are two vacant seats to be filled after Texas and Arizona Democrats Sylvester Turner and Raúl Grijalva died on March 5 and March 13, respectively.
Florida can expect to see a crypto-friendly regulatory environment
The victories for Patronis and Fine likely mean that crypto legislation will continue to see support in the US capital.
The Republican Party would have maintained its House majority even if it lost both seats in Florida, but it would have made it more difficult for some of the recently introduced Republican-backed crypto bills to pass through the House and Senate.
Related: Florida bill proposes strict rules against online gambling
At the Digital Assets Summit on March 18, Democratic Congressman Ro Khanna said he believes Congress “should be able to get” both a stablecoin and crypto market structure bill done this year.
Bills that could eventually make their way to the House include the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which passed the Senate Banking Committee in an 18-6 vote on March 13.
Senator Cynthia Lummis also reintroduced a Bitcoin reserve bill about a week after the Trump administration announced the establishment of a Strategic Bitcoin Reserve on March 6, with the legislation referred to the Senate Banking Committee on March 11.
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Several British trade associations have asked Prime Minister Keir Starmer’s office to appoint a special envoy dedicated to crypto and for a dedicated action plan for digital assets and blockchain technology.
In a March 31 letter, the coalition of six UK digital economy trade bodies urged Starmer’s special adviser on business and investment, Varun Chandra, for a “greater strategic focus and alignment to deliver investment, growth and jobs” for the crypto industry.
The group, which consisted of the UK Cryptoasset Business Council, Global Digital Finance, The Payments Association, Digital Currencies Governance Group, the Crypto Council for Innovation and techUK, noted the US policy shift on crypto under President Donald Trump and his appointment of a crypto czar.
Britain’s commitment to an economic trade deal focused on technological cooperation with the US “presents a significant opportunity to mirror the United States’ ambition in fostering leadership in blockchain, digital assets, and other emerging financial technologies,” the letter stated.
The group recommended that the UK appoint a blockchain special envoy, similar to the US, to coordinate policy, foster innovation, and position the country competitively in global markets.
The trade bodies also called for the development of a dedicated government action plan for crypto and blockchain technology, including a concierge service to attract high-potential firms.
They added that the government should acknowledge and leverage the commonalities between blockchain, quantum computing and artificial intelligence technologies, including potential applications for government services.
Another recommendation was to create a high-level industry-government-regulator engagement forum to ensure informed decision-making and cross-sector collaboration.
The UK crypto and tech associations lobbying the government for a policy shift. Source: LinkedIn
“With deep pools of talent, access to capital, world-class academic institutions, and sophisticated regulators, the UK provides an environment where digital assets and blockchain innovation can thrive,” they stated.
Related: UK should tax crypto buyers to boost stock investing, economy, says banker
The coalition argues that crypto and blockchain technology could boost the UK economy by 57 billion British pounds ($73.6 billion) over the next decade, with the sector potentially increasing global gross domestic product by 1.39 trillion pounds ($1.8 trillion) by 2030.
Tom Griffiths, the co-founder and managing partner of crypto compliance advisory firm BitCompli, said in response to the letter on LinkedIn that the Financial Conduct Authority “has a lot of talent and a good sight of future plans, but the UK is definitely losing pace with Dubai, Singapore, and other EU jurisdictions.”
“Now is the time for the FCA to act, or the UK will lose out on this huge opportunity, which is digital assets and all the benefits this sector can bring, not only now but over the next 20 years,” he added.
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