Examining the UK's non-dom regime

Far from being an obsolete colonial throw back, it turns out that the non-dom phenomenon has been revitalised in contemporary capitalism and helps to grease the wheels of the UK’s place in the global economy.

Professor Mike Savage

This project examines the effects of tax policy on the behaviour of the wealthy, focusing specifically on the UK's long-standing non-domiciled ('non-dom') tax regime. For over a century, this system allowed individuals who lived in the UK but claimed their permanent home was abroad to avoid paying tax on foreign income, a privilege originating in the 1799 Income Tax Act and limited to non-doms since 1915.

The research team used administrative data from HMRC to assess the fiscal impact of abolishing non-dom status and to understand how affected individuals respond to tax changes. Their analysis found that:

Non-doms collectively hold over £10 billion in offshore income.
Abolishing non-dom status could raise approximately £3.2 billion in tax revenue.
Most non-doms chose to remain in the UK following earlier reforms, and those who left were typically among the lowest tax contributors.

This work has received significant media coverage, which can be viewed under the 'News' tab below. These findings provided the crucial evidence base for the eventual abolition of the non-dom regime in March 2024. It demonstrates how empirical social science can shape meaningful and lasting policy change.

Dr Arun Advani, Director, Centre for the Analysis of Taxation (CenTax); Associate Professor, University of Warwick and Visiting Senior Fellow, LSE III

David Burgherr, Visiting Fellow, LSE III

Dr Andy Summers, Director, Centre for the Analysis of Taxation (CenTax); Associate Professor, LSE Law School and Faculty Associate, LSE III

Professor Mike Savage, Professorial Research Fellow, LSE III

Violetta van Veen, Research Assistant, LSE III.

Friedman, Sam, Gronwald, Victoria, Summers, Andrew and Taylor, Emma (2024) Tax flight? Britain’s wealthiest and their attachment to place. III Working Papers (131). International Inequalities Institute, London School of Economics and Political Science, London, UK.

Advani, Arun, Hughson, Helen and Summers, Andy (2023) How much tax do the rich really pay? Evidence from the UK. Oxford Review of Economic Policy, 39 (3). pp.406-437. ISSN 0266-903X.

Advani, Arun, Burgherr, David, Savage, Mike and Summers, Andrew (2022) The UK’s global economic elite: a sociological analysis using tax data. III Working Paper Series (79). International Inequalities Institute, London School of Economics and Political Science, London, UK.

Advani, Arun and Summers, Andy (2022) Measuring and Taxing Top incomes and Wealth, IFS Deaton Review of Inequalities. 

Advani, Arun, Burgherr, David and Summers, Andy (2022) Reforming the Non-Dom Regime: revenue estimates, CAGE Policy Briefing no. 38. 

Advani, Arun, Burgherr, David and Summers, Andy (2022) Taxing and Migration by the Super Rich. CAGE Working Paer no. 630.

March 2024: Abolition of the non-dom regime
In March 2024, the UK government abolished the non-dom tax regime. This landmark decision followed years of research led by Dr Arun Advani, Dr Andy Summers, and David Burgherr, whose work showed that the tax break primarily benefited a small group and that its removal would raise substantial revenue with minimal migration impact. Former Chancellor Jeremy Hunt replaced the domicile-based system with a clearer residence test, retiring the remittance basis after 225 years.

This story received significant coverage at the time and during the lead-up by outlets such as BBC News, Bloomberg, The Telegraph, The Independent, FT, and New Statesman.

February 2023: Research featured at LSE Festival
The team’s analysis on the demographics and geography of non-doms was showcased in the Mapping People and Change exhibition at the LSE Festival. A featured map illustrated the clustering of non-doms in London constituencies such as Westminster and Kensington, drawing public and media attention to the social concentration of tax advantages.

September 2022: Report found that 3.2 billion could be raised annually by taxing non-doms

In late 2022, the research team’s estimate that £3.2 billion could be raised annually by taxing non-doms on the same basis as other UK residents began to influence political debate. The estimate, derived from detailed analysis of HMRC administrative data, was widely cited in the media, in Parliament, and by the Labour Party, which incorporated it into its policy platform. The research demonstrated that this revenue could be raised even after accounting for any migration response from high-income individuals.

Summers, Andrew (Wealth, Elites and Tax Justice); Taxing the Super-Rich; ESRC; Research Grant; November 2022 – December 2026.

Summers, Andrew (Wealth, Elites and Tax Justice); ‘Capital Flight’ from a Wealth Tax; Founders for Good Ltd; Donation – Research Project Grant; September 2022 – December 2023.

Examining the UK's non-dom regime

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Wealth, Elites and Tax Justice | Go back to research programme