The Labour government is locked in urgent discussions with City of London leaders as it seeks to stem an exodus of wealthy individuals and attract new investment following the controversial scrapping of the non-dom tax regime.
Reeves Reviews Autumn Budget Fallout
Chancellor of the Exchequer Rachel Reeves changed the non-domiciled status in the Autumn Budget of 2024, replacing it with a residence-based system. This new framework taxes all long-term UK residents on their worldwide income, moving to a four-year "grace period" after the old tax status was axed.
However, according to a report in the Sunday Times, the Chancellor has already initiated a formal review of the policy's impact. This follows significant lobbying and reports of high-profile departures from the UK.
The Push for a "Pay-to-Play" Visa
Ministers are now understood to be negotiating a potential extension to the current grace period. Alongside this, they are considering a new "pay-to-play" visa aimed at the ultra-wealthy.
Lobby group Foreign Investors for Britain has reportedly submitted a proposal to MPs for a "global investor visa." This scheme would require participants to pay an annual fee of £200,000 and commit to investing £2.5 million in the country.
In return, they could avoid being taxed on their foreign income for up to 15 years and gain exemption from inheritance tax, as detailed by the Sunday Times.
High-Profile Exits and Ministerial Pressure
The drive for reform comes after several prominent British entrepreneurs left the UK. A notable example is Nik Storonsky, the founder of London-born fintech giant Revolut, who shifted his main residency to the United Arab Emirates. His updated residency status was confirmed in Companies House filings for his family company in October 2025.
Business and Trade Secretary Peter Kyle, appointed after Angela Rayner's resignation, is leading calls to attract wealth creators. His department has established a "global talent taskforce" with the ambition of helping the UK forge its own $1 trillion company.
Pressure groups are capitalising on recent Treasury concessions on inheritance tax for farmers and business rates to lobby for a policy pivot.
A government spokesperson defended the UK's appeal, stating: "The UK remains a highly attractive place to live and invest. Our main capital gains tax rate is lower than any other G7 European country and our new residence-based regime is now simpler and more attractive, while also addressing tax system unfairness so every long-term resident pays their taxes here."
