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Non-domes who have left the UK have to quit the exclusive private members club to prevent HM revenue and customs and pay taxes as they are still resident.
The lawyers have advised wealthy clients that tax authorities can use membership in clubs such as Annabelle, Soho House and 5 Hartford Street as evidence of strong ties to the UK. Annabel’s has an annual membership fee of £3,750, in addition to a participation fee of £1,850.
Many wealthy individuals, including steel billionaire Lakshmi Mittal, have either left the UK or have planned to abolish the non-Dom regime. This allowed British residents who declared their permanent homes abroad to avoid paying UK taxes on foreign income and profits.
A former Dom, who left the country to abolish the government, said she, on the advice of her lawyer, left the Arts Club and 5 Hartford Street in Mayfair, London. “They don’t even like being a gym member, so anything that shows a commitment to something (in the UK) is as proof of your desire to actually be here, even if it’s not expensive.” She currently divides her time primarily in Greece and Switzerland.
Philip Palumbo, managing director of the Walbrook Club in London, said he left when some of his non-Dom members left the country.
Palumbo added that he thought for mobile customers internationally that “certain clubs in the West End would struggle to escape the non-dome.”
Philip Palumbo, managing director of the city’s Walbrook Club, predicts that some clubs will struggle ©Credit: Neil Spence/Alamy
Other private members clubs are beginning to think about ways that non-domes can stop them from quitting completely. According to people close to the debate, the HMRC sometimes restricts 90 days a year, allowing them to impose a period of time in the UK where someone can spend the UK in the UK, which increased their chances of offering short-term membership for certain periods, including 90 days.
Another club has seen a surge in interest among members looking to switch from the UK to overseas membership, said someone familiar with the situation.
In the October budget, Prime Minister Rachel Reeves confirmed the abolition of the non-Dom government as of April 6, proposed by his predecessor, Jeremy Hunt. Those who decide to stay will see that their global assets could be exposed to 40% UK inheritance tax.
Recommended
Guidance from HMRC for legal residence tests. This is intended to determine whether a person is liable for UK taxes as they reside in the UK, and lists many factors to consider. These include UK spouses or children, local utility bills, and “membership of clubs such as sports, health, social clubs.”
Camilla Wallace, a senior partner at law firm Wedlake Bell, confirmed that he advised his clients to abandon their club membership when they leave the UK.
Wallace also asked what it means if he was a member of an international club offering “mutual” club membership in London for tax purposes.
