Changes will be made to the Temporary Repatriation Facility, a three-year scheme to help ex non-doms bring their assets to the UK at a discounted tax rate.
Downing Street said the tweaks, which will be made through amendments to the Finance Bill, did not change the government’s overall approach “to replacing the outdated non-dom tax regime”.
The prime minister’s official spokesman said the new system “addresses unfairness in our tax system, attracts the best talent and investment to the UK and ensures that everyone who is a long-term resident of the UK pays their tax here”.
A Treasury spokesperson said the changes were not expected to impact the £33.8bn the policy is expected to raise over the next five years by the government’s independent forecaster.
“The Temporary Repatriation Facility is designed to encourage non-doms to bring their funds to the UK, encouraging them to spend and invest this money here,” the spokesperson added.
However, Nigel Green, chief executive of global financial advisory firm deVere Group, said the announcement had “landed with a thud” among investors and wealthy individuals.
He said the “vague proposal to adjust the rules offers neither the clarity nor the assurances required to reverse the damage already inflicted”.
Conservative shadow chancellor Mel Stride said: “Labour’s Budget is falling apart in front of our eyes.
“At the election Labour said their plans would raise money, now they have been forced to admit their plans make the UK less attractive.
“But the damage is already done – tax revenue equivalent to hundreds of thousands of taxpayers has already been lost.”
Meanwhile, the Scottish National Party accused the chancellor of doing a “Davos deal for millionaires”, saying the government had become “rapidly out of touch”.
The party’s economy spokesman Dave Doogan said Reeves had “a listening ear for millionaires” but was “deaf to the difficulties of those millions still struggling with the cost-of-living crisis”.
Reeves chose to announce the relaxation in Davos as part of a multipronged effort to show willingness to change policy to help economic growth.
On Wednesday she also set out changes to visas to allow top talent in Artificial Intelligence (AI) and medicines research to come to the UK.
Some in industry feel there is an opportunity for the UK to poach top talent in science and pharmaceuticals from the US under the new administration, and in AI from European Union.
