Following news reports that UK Chcancellor Rachel Reeves is considering a U-turn on the proposed policy of charging non-doms on their total global wealth for IHT purposes, there have been reactions concerning both non-doms and those who are not – with the common denominator being the ongoing uncertainty around the implementation.
On the non-dom issue,Anthony Whatling, Managing Director at Alvarez & Marsal, commented: “The inheritance tax change is perceived by many as the most contentious aspect of the non-dom reforms – complex and globally out of step. It’s little surprise it’s driving people away. If the Government wants to keep wealth – and the business that follows it – in the UK, this is the lever it needs to pull.”
Marc Acheson, Global Wealth Specialist at Utmost Wealth Solutions, said: “Whilst any changes that can make the UK more internationally competitive are welcome, the real challenge now is restoring trust and stability, particularly as so many in the non-dom community have already left or are still planning to leave.”
“The other challenge is how the government plans to balance or navigate any reversal of changes on trusts previously settled by former non-doms, while at the same time proposing to extend inheritance tax to business property, agricultural assets, and even pension funds for others.”
Dominic Lawrance, Partner at International Law Firm, Charles Russell Speechlys, said: “Obviously this is all unclear speculation, and the reported rumours contradict each other – some indicating that the government is considering a U-turn, others indicating that the government is strongly aligned with its current position on “non-doms”, and would regard a U-turn as politically difficult”
“There is no doubt that the government’s actions in this area have been economically damaging and that this was a policy made with limited consultation. It was arguably unwise to proceed with the reforms when there was such strength of informed opinion among professional advisors that the reforms would provoke an exodus. If the Chancellor is surprised by the effect of the policy, she shouldn’t be, as advisors were ringing alarm bells about the likely socio-economic impact from day one.
“If the government can bring itself to soften the IHT rules in relation to internationally mobile individuals, that would clearly be a step in the right direction, but it may be too little, too late. So many of the horses have already bolted.
“Moreover, although IHT exposure is perhaps the most significant concern about the current UK tax regime for internationally mobile investors and entrepreneurs, it is not the only aspect of the regime which is perceived as less competitive compared to the tax regimes offered by other countries. If the government is serious about attracting these individuals to the UK, it needs a more comprehensive, properly considered, special tax regime which covers income tax and CGT as well as IHT.”
Scope
That reference to driving people away follows recent estimates of the number of non-doms who will relocate out of the UK in reaction to the increased tax on themselves and their families.
The Office for Budget Responsibility (OBR) stated in a Supplementary forecast information release issued in January 2025 that “The baseline population of non-domiciled taxpayers has been projected forward based on trends in the latest outturn data, assumed to decrease by 1.5 per cent a year. Applying the stricter requirements of the new FIG regime to this population, HMRC estimated that by 2025-26, around 14,200 non-domiciles will be eligible for the new regime, while 7,100 will be ineligible for the new regime, alongside around 600 ‘deemed’ domiciles whose offshore trusts are made tax liable by the reforms.”
However, there are also other views being pushed towards policy makers. The Tax Justice Network says its recent analysis – co-published with Patriotic Millionaires UK and Tax Justice UK – of trends of millionaires moving between jurisdictions suggests there has been no significant exodus from the UK. That research was published in June 2025 and is based on 2024 figures.
Scammer warning for doms
Meanwhile, the issue of IHT changes are not just a conundrum for non-doms or domiciled HNWIs. The uncertainty around policy is creating other risks.
Claire Trott, Head of Advice at St. James’s Place says: “With unused pension savings due to be brought inside the inheritance tax (IHT) net from April 2027, and the legislation and communication around how this will work remaining vague, savers may feel unsettled and unsure about whether to continue putting money into their pension. Some people may even be tempted to withdraw large sums from their pension out of fear their families will be hit with an IHT tax bill in future. This is particularly worrying as it can increase vulnerability to potential scams.”
“Pension providers offer protection against scams, so when savings are taken out of these schemes they are more susceptible to fraudulent activity. In addition, those who withdraw funds with no real plan for what they are going to do with the money can find themselves at a higher risk too. They may be approached by someone offering to take care of their cash, IHT free –, and while this may sound appealing, it could be a scam.
“Anyone that is considering accessing their pension to avoid an IHT bill should seek financial guidance where possible, especially if they’re taking money out without knowing what to do with it. It’s important to be armed with information about how to navigate the upcoming changes, but also to ensure hard-earned pension savings are kept safe from scammers.”
Trott has outlined tips to protect consumers from pension scammers:
- Be wary of unsolicited calls: “It’s important to remember that pension cold calling is illegal in the UK. If you receive a call from an unknown caller about your pension, it’s likely to be a scam, so do not share any personal information or move money out of your pension at their instruction. Hang up or if you can get some information on them e.g., their phone number and company name, report it to the Information Commissioner’s Office so they can take necessary action. Be cautious of emails, texts, or messages on social media offering “free pension reviews” or “guaranteed returns” too.
- Don’t be rushed to take action: “A tactic scammers often use is to pressure you to act quickly. Take your time to make decisions and consult with trusted advisers or family members before moving money from your pension. Remember, a genuine adviser will give you time to consider and won’t rush you into a decision.
- Be aware of red flags: “The following terms are used often used by pension scammers, so if you see any of them, be aware as it could be a scam. Promises of “high or guaranteed returns”, “overseas investments” or schemes that seem too good to be true, probably are. Requests to transfer your pension into a single investment, especially if you’re offered cash back or an upfront bonus, is another red flag to avoid.
- Only use trusted sources: “As a rule on thumb, government-backed services like Money Advice Helper or Pension Wise are safe sources to use for pensions advice. It may also be worth speaking to a regulated financial adviser who can guide you through the upcoming pension changes and how to manage your estate.”
