The UK’s removal of the non-domicile tax status has triggered a notable departure of high-net-worth individuals, with Canadian entrepreneur Dr Ann Kaplan Mulholland among those condemning the move as damaging to the economy and investment climate.
A significant shift in the UK’s tax landscape has prompted the departure of high-profile individuals, with Canadian entrepreneur and reality television personality Dr Ann Kaplan Mulholland being one of the most vocal critics. Dr Kaplan, who reportedly has a net worth of £500 million, recently made headlines after leaving the UK due to the abolition of the non-domicile (non-dom) tax status, which exempted wealthy individuals from paying UK tax on their foreign income in certain circumstances.
The decision to dismantle the non-dom status was supported by key figures in the Labour Party, including Rachel Reeves. Dr Kaplan termed this move an “astronomical error” that could potentially drive ultra-wealthy individuals away from the UK, thereby reducing their contributions to the economy. Speaking to MailOnline from her penthouse in Las Vegas, she stated: “It doesn’t make any sense. It’s not that we’re not willing to pay taxes: we do pay taxes in the UK, we employ over 100 people.”
Dr Kaplan and her husband, Stephen Mulholland, a former plastic surgeon, had resided in the UK for three years, during which they invested approximately £25 million to refurbish Lympne Castle, a medieval property in Kent, into a luxurious wedding venue. However, the new tax regime has prompted them to relocate to Milan, Italy, where a more accommodating non-dom structure exists. Italy charges a flat annual fee of €200,000 (£171,500) plus additional fees per family member to shield foreign assets from local taxation—a stark contrast to the UK’s previous non-dom regime.
Under the newly reformed UK tax structure, individuals who had previously enjoyed non-dom status will now be subject to UK taxation on their global income after a transitional period. This shift is expected to have repercussions not just for high-net-worth individuals but also for the broader UK economy. The Office for Budget Responsibility (OBR) predicts that the number of individuals claiming non-dom status could fall by approximately 12% within the year, while the number of ‘deemed domiciled’ individuals may decline by a quarter.
A report by New World Wealth highlighted that London has seen an exodus of 11,300 dollar millionaires over the past year, making it one of the only major cities to experience a net loss in wealthy residents in the last decade. Dr Kaplan noted that this trend signals that the UK may be inadvertently signalling that it “doesn’t want the wealthy,” a notion she believes could have far-reaching implications for the nation’s fiscal health.
Dr Kaplan’s remarks were directed towards Rachel Reeves, whom she labelled “reckless,” suggesting that the government appears disinclined to attract affluent individuals who contribute significantly to the economy. She expressed concern over the potential impact on jobs and investments, stating: “We bring clean capital to the UK… but it’s like they don’t really want the wealthy in the UK.”
In a historical context, the non-dom status originated in 1799, and its recent abolishment continues to stir debate about the future of wealth taxation in the UK. Critics of the change argue that it will not only discourage investments but also result in a substantial financial loss for the UK treasury. The Treasury estimates that the changes to the non-dom scheme may yield £12.7 billion over the next five years; however, the OBR warned that this figure is highly uncertain given the potential migration of affluent citizens.
Dr Kaplan’s situation reflects a growing unease among business leaders concerning the UK’s competitiveness as a destination for wealthy individuals. Her criticisms echo the sentiments of other high-profile expatriates, including steel magnate Lakshmi Mittal, who have chosen to depart ahead of the new tax year.
Though the Treasury maintains that the UK remains an attractive location for wealthy individuals, the reactions from figures like Dr Kaplan suggest that redefining tax policies related to wealth may require careful reconsideration to avoid adverse consequences for the nation’s economic stability.
Source: Noah Wire Services
- https://www.ft.com/content/7fafdfe5-f25a-4cb9-a326-03aa54358fe8 – This article discusses steel magnate Lakshmi Mittal’s plans to leave the UK due to the abolition of the non-domiciled (non-dom) tax regime, highlighting the impact of the tax change on high-net-worth individuals.
- https://www.ft.com/content/749e44fd-ff0d-45ff-9e08-427fb59639ca – This piece reports on Swiss family offices considering relocating to Dubai due to dissatisfaction with Switzerland’s regulatory environment, illustrating a broader trend of wealthy individuals seeking more favorable tax jurisdictions.
- https://www.lemonde.fr/en/economy/article/2024/08/09/in-the-uk-two-centuries-of-tax-exemption-for-wealthy-foreigners-are-about-to-end_6712079_19.html – This article details the UK’s plan to end the non-dom tax status, a tax exemption that has existed since 1799, affecting wealthy foreigners and prompting discussions about its implications.
- https://www.reuters.com/breakingviews/uk-is-now-risky-lab-rat-rich-tax-perk-reform-2024-12-04/ – This analysis examines the UK’s abolition of the non-dom tax status and the potential risks of capital flight as wealthy individuals consider relocating to low-tax countries.
- https://moneyweek.com/personal-finance/tax/where-rich-relocate-to – This article explores the trend of wealthy individuals leaving the UK due to higher taxes and the abolition of non-dom status, highlighting popular destinations like the UAE, USA, Singapore, Canada, and Australia.
- https://www.ft.com/content/24662a72-7dc8-4692-b3e8-64ebcf8d0119 – This report covers Richard Gnodde, a top Goldman Sachs banker, leaving the UK for Milan in response to the abolition of the non-domiciled tax status, underscoring the broader trend of wealthy individuals exiting the UK.
- https://www.dailymail.co.uk/news/article-14614493/ann-kaplan-mulholland-millionaire-reality-tv-uk-castle-non-dom.html?ns_mchannel=rss&ns_campaign=1490&ito=1490 – Please view link – unable to able to access data
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
Narrative discusses recent tax reforms and Dr Kaplan’s relocation, indicating alignment with current policy changes. No explicit date for article publication, but context suggests recent coverage. Tax reforms and OBR projections appear contemporary.
Quotes check
Score:
9
Notes:
Quotes attributed to Dr Kaplan, including specific criticisms of Rachel Reeves and tax policy impacts, lack direct online corroboration but appear original to this narrative. No evidence of recycling from older articles.
Source reliability
Score:
6
Notes:
Narrative originates from Daily Mail, which attracts mixed reliability assessments. UK Treasury and OBR data cited align with factual frameworks, enhancing credibility of broader claims.
Plausability check
Score:
8
Notes:
Claims about non-dom reforms and wealthy individuals’ relocations align with recent policy changes and New World Wealth migration data. Dr Kaplan’s circumstances mirror known tax-driven relocations.
Overall assessment
Verdict (FAIL, OPEN, PASS): OPEN
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
Narrative presents plausible claims supported by recent policy context and migration data, but reliance on Daily Mail and uncorroborated direct quotes introduces uncertainty. Cross-referencing Treasury/OBR projections with independent reports would strengthen verification.
