Abolishing the Non-Dom regime and changes to IHT, what does the Autumn 2024 UK Budget mean for investors?

In what has been described as the largest tax-raising budget in 30 years, the UK’s first female chancellor, Rachel Reeves, has raised more than a few eyebrows in her bold move to raise an additional £40bn through taxation.

The ambition to fill the £22bn fiscal black hole inherited from the previous government and boost long-term growth has sparked a range of reactions.

With a focus on increasing investment in public services, particularly the National Health Service (NHS), public sentiment is generally supportive.  However, there are concerns from businesses who are expected to bear the brunt, particularly with the rise in employer national insurance contributions.

For High-Net-Worth Individuals (HNWIs) and investors, some of the tax changes will come as a bit of a blow with many experts commenting that they may be counter-intuitive moves for investment in the UK economy. Here are some key points:

  1. Abolishing the Non-Dom Regime: Although this has been on the cards for a while, the the UK non-domiciled (non-dom) tax regime will be scrapped from April 2025 and is expected to raise approximately £12.7bn over the next five years. For individuals who are UK residents but have their permanent home (domicile) outside the UK, this means they will no longer benefit from the tax advantages of non-dom status. Instead, a new residence-based regime will be introduced, which aims to attract investment and talent to the UK.
  2. Inheritance Tax Changes (IHT):  The new residence-based regime for non-doms will affect IHT. Individuals who have been UK residents for 10 years or more will be subject to IHT on their worldwide assets, even if they leave the UK, where there will then be a 10-year “run-off” period. Offshore trusts will no longer be able to shelter assets from IHT under the regime, forcing HNWIs who use trusts as part of their estate planning to look at alternative strategies.
  3. Capital Gains Tax (CGT) Changes: CGT rates will increase to 18% for lower rate taxpayers and 24% for higher rate taxpayers from 30 October 2024. This change will equalise the tax rates for residential and non-residential property.
  4. Increased National Insurance Contributions (NIC): There will be a 1.2% increase in NIC for employers from 6 April 2025, and a reduction in the secondary threshold for employee earnings.
  5. Undertaxed Profits Rule (UTPR): The UTPR, part of the Organisation for Economic Co-operation and Development (OECD) pillar two multinational tax changes, will apply to accounting periods beginning on or after 31 December 2024. This could affect large corporates with global income.
  6. Offshore Receipts in Respect of Intangible Property (ORIP): The income tax charge on ORIP, which was introduced five years ago, will be abolished for income arising from 31 December 2024. This change is expected to make offshore investments in intangible property more attractive, as it removes the additional tax burden on such income.

These changes demonstrate a tightening of tax regulations around offshore investments and trusts, which Chancellor Reeves labels as simpler, fairer and removing outdated concepts from the system. While other experts are thankful that there is now certainty, clients will be taking stock and considering exiting the UK.  Either way, these changes and the lead up to them, have been influencing investment strategies and decisions and will continue to do so until the dust settles.

If you think that any of these changes from the Autumn 2024 UK Budget will affect you, we strongly recommend that you speak to your tax adviser, then contact us here at Forward Group Limited about how we can support you.

At Forward we Focus on your Future.

Published
August 12, 2025
October 31, 2024
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