UK tax crackdown hits South African expats’ wealth

AS THE United Kingdom moves to align its tax regime affecting residents who are not domiciled there with similar systems the world over, experts are warning that this poses massive changes in the tax treatment of income and assets and its effects are wide reaching.

- NICOLA MAWSON

The first finance act under the Labour Party government led by Sir Keir Starmer makes what the UK's Chartered Institute of Taxation (CIOT) explained are "major" changes for people who live in the UK but are not permanently domiciled there.

Among those is the removal of the VAT exemption for private school fees, increases in some rates of capital gains tax and stamp duty land tax, and the extension of energy profits levy on the oil and gas sector.

Effectively, it means that all those who live in the UK face UK tax on worldwide income.

As chairman of CIOT's Technical Policy and Oversight Committee, John Barnett, said, "this is a huge change in how the UK treats international taxation".

The changes in the tax regime now mean that, regardless of where someone considers home to be - where they are domiciled - if they live in the UK, they will be subject to tax on income earned anywhere across the globe and not just if it was taken into the country, as was the case before.

Data source compilation company, Media Hack Collective, stated that there were around 247 000 South Africans living in the UK in 2020, a number that had increased by about 80% in the past decade.