ArcelorMittal Executive Chairman Laxmi Niwas Mittal is reportedly planning to leave the UK after a major overhaul of the country’s tax regime for non-domiciled residents, as per a report by the Financial Times. Mittal, one of Britain’s wealthiest individuals, is set to reevaluate his residency status in respect to new rules that remove the longstanding tax advantages for foreign income and offshore assets.
A close associate of Mittal told Financial Times, ”There is is a good chance he will cease to be a UK tax resident.’’ The Indian-born industrialist, who has been staying in London since 1995, is now exploring alternative jurisdictions; a final decision is likely to take place later this year.
What is the UK’s new tax reform for non-domiciled residents?
UK Chancellor Jeremy Hunt last year announced the plan to remove the long-debated ‘’non-domiciled’’ tax status. Under this special status, wealthy residents, usually foreign nationals staying in the UK but claiming that their permanent home elsewhere, did not need to pay taxes on income generated abroad, unless it has been brought in the UK. This loophole has been popular among billionaires living in London, as per a report by Reuters.
Tax crackdown sparks exodus
Mittal’s potential exit outlines a broader trend among ultra-high net worth individuals reconsidering their ties to the UK. The scrapping of the 226-year-old ”non-dom” regime has raised concern among the elite, many of whom are planning to move to more tax-friendly places like UAE, Switzerland, and Italy.
Mittal stepped down as CEO of his company in 2020, handing it to his son, Aditya Mittal. He was also a major donor for the Labour Party under Tony Blair. He now serves as executive chairman of the €24 billion steel conglomerate, in which the family owns a 40% stake.
In the UK, Mittal is the owner of several multiple properties, including a £67 million mansion in London’s Kensington Palace. It was once considered the world’s most expensive private home. He also has luxury real estate in Switzerland’s St Moritz, Asia, US, and Dubai.
Opposition reform climbs up
Critics believe that the abolition of the non-dom regime could backfire economically. Many non-doms are not only paying taxes on UK income but also paying significantly for local economies, property taxes, philanthropy, and luxury spending. They also warn that their departure can result in loss of revenue and reduction in investment.
Conservative Chancellor Jeremy Hunt was the first to introduce the reforms in March 2024, and it was later expanded by Labour Chancellor Rachel Reeves in the October Budget.