LONDON: Britain's Labour government is reconsidering part of its plan to toughen up tax rules on wealthy foreigners living in the country, known as its non-dom tax, media reports said on Friday.
Prime Minister Keir Starmer's Labour Party was elected in July on a promise to rebuild Britain, and has said it will increase taxes on the wealthiest to help invest in public services and infrastructure.
Britain's non-dom tax system, which enables people living in Britain to pay little or no UK tax on money earned overseas, has long been a point of contention in Britain, and the former Conservative government had also set out plans to toughen the rules.
But the Labour Party said it would go further, expanding Britain's inheritance tax regime to include foreign assets held in trusts designed to mitigate such levies.
The Financial Times said finance minister Rachel Reeves was now ready to water down the plan over fears that it would fail to raise any money. It said no final decision had been taken.
Private banks and advisers to the super-rich have said some clients with non-dom status will quit the country if the changes go ahead.
A spokesperson for the Treasury said the media reports were speculation and that the Office for Budget Responsibility, the country's fiscal watchdog, would certify the costings of all measures announced at the budget on October 30.
"We are committed to addressing unfairness in the tax system so we can raise the revenue to rebuild our public services. That is why we are removing the outdated non-dom tax regime and replacing it with a new internationally competitive residence-based regime focused on attracting the best talent and investment to the UK," the spokesperson said.
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