The phasing out of a longstanding British tax law that has benefited the wealthy for centuries has triggered affluent individuals to seek new tax havens, including the Turks and Caicos Islands (TCI) for relocation.
The news first broke on Mansion Global, an award-winning digital publication about the global real estate market.
Mansion reported that in early March, the U.K. government announced the gradual elimination of the “non-domicile” rule, a policy that exempted certain British citizens from significant tax liabilities on earnings made outside the country. This rule allowed individuals residing in the U.K. but claiming permanent residence in another country to avoid paying income or capital gains taxes on foreign-earned income for up to 15 years, provided they did not transfer the income into the U.K.
The "non-dom" rule, enacted over 200 years ago, has primarily benefited wealthy citizens with homes in multiple countries, costing the government an estimated £2.7 billion (US$3.4 billion) annually in lost tax revenue. Political and public pressure led to its impending end, scheduled for April 6, 2025. Consultancy firm KPMG estimates there are over 65,000 individuals with “non-dom” status, with many from China and Russia.
The rule change is prompting many to consider relocating to British Overseas Territories, where they can benefit from residency through the U.K. while enjoying lower long-term income taxes. Once individuals reach four years of residency in the U.K., they will be taxed on their worldwide income, but this will not apply to those living in British Overseas Territories.
The publication quoted Sean O’Neill, managing partner of The Agency Turks & Caicos, who spoke of the consistent demand for luxury real estate in the TCI, driven mainly by foreign buyers.
It also quoted Paul Young of Corcoran Cayman Islands, who said he has observed that global events, including the pandemic and the upcoming rule changes, have increased property prices in the Caymans. Stefan Cohen, managing partner at The Agency Cayman Islands, reported a rise in inquiries from “non-doms” looking to list their homes in response to the heightened interest.
The publication also spoke with Matthew Marco, director of marketing and luxury real estate specialist at Bond Bahamas, who noted the historical connection between the U.K. and the Bahamas and highlighted the recent surge in interest.
“In the last 30 days business is unheard of,” Marco said, citing an unusually high number of families booking trips and purchasing properties in the Bahamas.
Several Caribbean countries, including the Turks and Caicos Islands, offer citizenship or residency through investment programs, which have become increasingly attractive. For instance, investors can secure residency in the TCI with a minimum required investment is US$1 million, while in The Bahamas they can secure residency by purchasing a property worth at least US$750,000. In the Caymans, the required investment exceeds US$2 million, but residents and citizens face minimal tax liabilities.
Although the rule ends next April, other stipulations will extend the implementation through 2027, potentially leading to a gradual increase in taxation for non-domiciled residents and providing more time for those considering relocation. The impact of the movement of 65,000 to 70,000 “non-doms” on the luxury real estate markets in these territories remains uncertain.
In the meantime, O’Neill is skeptical about the overall effect, stating, “When you look at the reported number of ‘non-doms,’ 68,000 sounds like a lot, but once you start spreading them around the world, as well as those who choose to remain in the U.K., I don’t feel that it will cause a huge influx into new destinations.”