Jeremy Hunt is looking at scrapping the non-dom status to fund pre-election tax cuts in next week’s Budget.
The Chancellor is considering the move as one of a range of measures to bring in as much as £3.6 billion.
Mr Hunt would be poaching one of Labour’s key economic policies which its spending plans rely on.
It would also neutralise an attack line by Sir Keir Starmer’s party on Rishi Sunak, whose wife Akshata Murty previously benefited from the arrangement.
However it would fuel the debate about whether axing the regime would hinder the economy by pushing wealthy foreigners elsewhere.
Under the rules, non-domiciled people who have their permanent home elsewhere do not have to pay UK tax on overseas income.
It comes as recent figures from the Office for Budget Responsibility revised down the scope for tax cuts.
But the Chancellor is determined to slash taxes in the Budget on March 6 with a reduction in National Insurance understood to be a likely option.
Former Conservative chancellor George Osborne said this week if he were in the Treasury he would look at whether to “steal Labour’s clothes” by changing the non-dom regime.
He told his Political Currency podcast: “If I was the chancellor I would definitely be looking to do something on the non-dom regime that hopefully didn’t kill the golden goose that lays the golden egg of having international visitors to Britain that invest in this country, but nevertheless takes money off the table and puts the ball back into Labour’s court.”
But Mr Hunt has previously spoken out against the move in November 2022.
He told BBC Radio Four: “These are foreigners who could live easily in Ireland, France, Portugal, Spain. They all have these schemes. All things being equal, I would rather they stayed here and spent their money here.”
According to HMRC, there were 68,000 non-doms in the tax year ending 2022.
