Sunak’s family to avoid inheritance tax despite crackdown on non-doms

Jeremy Hunt, the Chancellor, announced in last Wednesday’s Budget that he was scrapping non-dom status.

Downing Street has said that the Prime Minister did not take part in policy talks about the changes to avoid a potential conflict of interest, and only saw the policy once final decisions had been taken.

Under the current non-dom rules, foreign nationals lose their non-dom status after 15 years, after which they will have to pay inheritance tax on their worldwide assets.

Britain charges a 40pc inheritance tax rate on estates worth more than £325,000, or £1m for married couples passing their main property to their children.

The Telegraph has been campaigning for the Government to abolish the levy but Mr Hunt left it untouched in the Budget.

The Government announced there will be a consultation on how to replace the inheritance tax rules for non-doms, with plans to move to a residence-based system.

Currently it is UK domiciles who pay inheritance tax but once the domicile status is abolished, the Government wants the levy to apply to UK residents who have been in the country for longer than 10 years.

The rules are still subject to consultation and it is yet to be seen whether the Government will address the loophole in the double tax treaty.

A government spokesman said: “We have ten longstanding double tax treaties covering IHT with other countries, including France, Italy, Sweden, as well as India. The recently announced non-dom policy does not affect any of these existing treaties.”