The end of a status that has existed for over 200 years is making waves and causing considerable division. This highly attractive regime was originally intended for expatriates living in the UK without being domiciled there for tax purposes.

Without passing judgment, this change may appear sudden and drastic. However, through this far-reaching reform, the UK aims to reduce tax loopholes, promote greater fairness, and ensure that everyone contributes to the nation’s efforts.

Introduced in 1799, this status offered the following key advantages:

• Avoiding taxation on foreign income, provided it was not remitted to the UK for fifteen years.

• Structuring succession planning more favorably by maintaining tax domicile outside the UK.

It will now be replaced by the “Foreign Income and Gains” (FIG) regime, which is based solely on tax residency. Unsurprisingly, this new framework is significantly more restrictive.

Without diving into the technical details of FIG—and once again, without judgment—some of the potential impacts identified are as follows:

• A reduced fiscal incentive to relocate to or remain in the UK long-term.

• A risk of double taxation for individuals with complex offshore structures.

• A need to reorganize foreign trusts or holdings, particularly in preparation for inheritance tax (IHT).

• A potential exposure of a large portion of global wealth to a 40% tax rate.

Beyond speculation and sentiment, our experience in private wealth recruitment shows that the consequences are real.

Before discussing departures, it’s worth noting that London—once seen as one of the most desirable career destinations—is currently losing some of its appeal. Ongoing debates around tax tightening and economic uncertainty are diminishing its attractiveness to top talent.

To enhance the City’s appeal, the pressure naturally shifts to employers. If they wish to continue attracting high-potential candidates, they will need to offer more competitive compensation packages.

Beyond attraction, retention is now a growing challenge. In 2024, some 10,800 millionaires are reported to have left the UK—an increase of 157% compared to 2023. This exodus can be partially attributed to the upcoming abolition of the Non-Dom status.

Previously, leaving the UK was often just a passing thought. Today, some candidates are taking action—often prompted by the decisions of their wealthy clients, which tends to amplify the trend.

In practice, these departures are benefiting more attractive financial hubs such as the UAE, Switzerland, Italy, Monaco, and Portugal.

Can we imagine a financial center of such magnitude declining over time? Let’s hope that its leaders will be able to adapt the reforms needed to ensure that “The City” remains “The City.”