Non-Dom: Towards a tax exodus of large fortunes towards Switzerland

“It’s not just Monaco, Dubai or the United States. Particularly for the quality of life, Lugano is also a pearl for wealthy taxpayers who are considering leaving the United Kingdom due to the new tax policy which will affect them,” says Marco Chiesa, finance director of the Ticino economic capital. . Across the Channel, a profound reform will come into force on April 6.

On the one hand, it will abolish the “non-dom” status which allows people residing in British territory for less than fifteen years, but without being domiciled there, not to pay tax on income earned there. foreign and on inheritances relating to property located outside British territory. On the other hand, it will raise the tax on capital gains and capital gains on carried interest (carried interest)which affect the performances obtained by private equity fund managers.

Proposed by the formerly ruling Conservatives, then adapted and implemented by the Labor government, this policy has already prompted many taxpayers to leave the UK for warmer climes. And the movement is only just beginning.

“We must seize this opportunity to position ourselves better and to attract large assets to our city,” underlines Marco Chiesa. Last November, he traveled to London to take part in an event organized jointly by his city and the Swiss-Great Britain Chamber of Commerce, in order to highlight the assets of Lugano. And, according to him, there are many: flat-rate taxation of taxpayers based on their expenses, quality of health care and private schools, mild climate, security, political and legal stability.

Tax lawyer within the Valfor study, Philippe Kenel does not understand this approach which is similar to active canvassing. “If this could be justified in the past, this is no longer the case today. He even represents, he asserts, a risk by bringing up the theme of taxation according to expenditure to the political level by encouraging the opponents of this regime to oppose it again.

How many people out of the 74,000 beneficiaries of the non-dom regime will choose to go into exile in Switzerland to benefit from its tax attractiveness? They have the possibility of settling in the German-speaking cantons such as Zug, Schwyz or Obwalden to benefit from a very low tax on wealth and income in intercantonal comparison, or in the cantons of Geneva, Vaud, Berne, Grisons, Valais and Ticino where they can be imposed on a flat rate basis.

“If a third decide to leave the UK, and 5% opt for Switzerland, that represents around 1,200 people. This hypothesis seems quite realistic to me,” says Hugues Salomé, partner in the Tax & Legal department of KPMG Switzerland.

A clear interest in Geneva and Valais

When the latter went to London, he noticed that his clients showed keen interest to emigrate to our country. And especially in Geneva, because of its urban setting which offers all the services sought by wealthy people. The Geneva branch of the Swiss-Great Britain Chamber of Commerce is also planning to organize an event there intended for financial players, in order to expose them to the challenges posed by British tax reform.

Valais will probably also attract a significant number of them. “Lump sum tax demands are much higher than usual. I just had a telephone conversation with a Brazilian woman, and the day before I met two French women in Verbier. All benefit from non-dom status in the United Kingdom,” says Paul-André Roux, founder of Roux & Associés in Sion, during our interview in mid-December 2024.

Hugues Salomé also observes that the abolition of the non-dom regime has a collateral effect which is favorable to Switzerland. “European and Asian nationals who were considering relocating to the United Kingdom are giving up doing so in favor of other jurisdictions, and I expect,” he says, “that some will decide to settle in Switzerland. »

For his part, tax lawyer Philippe Kenel hardly believes in a massive arrival of people from the United Kingdom and other horizons. “Britons and non-European foreigners with non-dom status are considered third-country nationals. They therefore need a residence permit, and a package costs them more than for a French person, for example,” explains Philippe Kenel. But, he insists, Switzerland remains attractive. Its tax legislation is stable, unlike that in force abroad where laws can change quickly, as shown by Italy which has just doubled the amount of flat-rate taxation.

Jean-Philippe Buchs is a journalist. Passionate about economic policy. Apprentice training in commerce, then degree in political science. Distinctions: local journalism prize in 1991, Jean Dumur prize in 1998, AgroPrix in 2005 and 2019.More info

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