Chancellor Hunt said he would make the system fairer and will replace it with a “modern residency system.”

The change was announced as part of a range of tax measures in the 2024 Spring Budget as a General Election looms on the horizon.

Non-doms are taxpayers who live in the UK but whose home for tax purposes is overseas.

Currently non-doms only pay UK tax on money earned in the UK.

Scrapping the non-dom tax status could be popular with voters as the Government looks to boost its finances.

Claire Trott, divisional director for retirement and holistic planning at wealth manager St James’s Place, said: “The scrapping of the non-dom status is estimated to bring in over £2.7 billion of extra tax revenue which will be used to fund the other tax cuts announced in the Budget.

“Moreover, this was one of Labour’s proposed changes so the Conservatives taking this “tax windfall” from Labour’s calculations will certainly hamper their proposed spending plans. If Labour do win the next election, they will have to consider what to do about this Budget hole the Conservatives will have left them. They will have to choose whether to change where the saving is spent, or to just try and fulfil their spending plans in other ways.”

Nigel Green, CEO and founder of financial advice firm deVere, which counts many expats as clients, said the changes to the non-dom regime could drive people out of the UK.

He said: “The scrapping of the non-dom tax status is likely to be a 'push factor' from the UK, depriving the country of considerable direct and indirect investment as those affected are likely to simply move to more attractive jurisdictions.”