UK

The proposed abolition of the current Non-Dom tax regime marks a significant shift in the UK’s fiscal framework. The new Labour UK government will be taking forward earlier plans to harmonise UK tax resident individuals’ taxation on the basis of their worldwide income and gains, albeit with some modifications.

Luxembourg Finance Minister Yuriko Backes is visiting London this week, at a time when advocates of maintaining strong UK-EU financial services relationships are struggling to have their voices heard. The Luxembourg government has sought to take the heat out of Brexit arguments since the 2016 leave vote, and this visit is the latest such effort. 

The UK has taken a further cautious step towards the permanent regime which will govern access to its market for EU-based Ucits funds. This came with the introduction of regulations establishing the Overseas Funds Regime (OFR) on 23 February. This gives a clearer but still incomplete picture of how Luxembourg-based retail funds could access UK-based investors over the long term. 

Although the UK led the way in the rollout of vaccinations and Brexit was largely overshadowed by the Covid pandemic and reopening, the divorce continues to cause uncertainty among investors. 

A separate UK ESG investing taxonomy and a couple of foreign-fund access regimes that replicate EU rules are some of the ways the London government is considering using its post-Brexit powers. Meanwhile in Luxembourg, the CSSF is working to reduce complexity for market players regarding the implementation of EU sustainability rules.