The government is set loosen its tough stance on non-doms.
According to the Financial Times, the Treasury is considering altering the way it taxes offshore trusts, on fears its proposals could force out wealthy foreigners.
The government has embarked on a crackdown on non-doms recently.
In his summer budget last year, then chancellor George Osborne unveiled proposals to abolish permanent non-domicile status for those who have lived in the UK for 15 of the past 20 years.
The new rules are scheduled to come into force next April, with the government previously predicting they could boost its coffers by up to £1.5 billion.
Non-dom trusts had initially escaped the crackdown after the Treasury said last October it wanted to spare wealthy families who had set up an offshore trust before the new rules were introduced.
'[They] would find it very punitive and administratively burdensome to have to recreate sufficient history of the transactions that may have taken place in the trust,' the Treasury said at the time.
However, in August the government toughened its stance, unveiling proposals to remove the tax-exempt status of offshore trusts if any benefits are paid out.
In a consultation last week, The Chartered Institute of Taxation said the proposals were of concern because of their 'breadth and potentially draconian effect'.
Following the criticism, the Treasury is now looking at a different approach, according to the FT.
This could remove tax liabilities on all future payouts, with those gains only subject to capital gains tax when the payment is made to a UK resident.