How the non-doms keep their cash safe
Michael Savage and Francis Elliott | The Times
Published at 12:01AM, July 10 2015
Wealthy non-doms will successfully move their money or relocate overseas to avoid paying hundreds of millions of pounds under new tax laws, according to a Treasury analysis.
The figures indicate that non-doms will shift about £500 million out of the grasp of the taxman in a single year as a result of the new rules.
George Osborne used his budget this week to unveil a clampdown on the non-dom tax status, which allows those with it to avoid paying UK tax on their overseas earnings. The changes will bring in an extra £475 million in 2018-19, according to the Treasury.
However, documents published alongside the budget revealed that the tax raised from the move would be “more than 50 per cent lower” because non-doms would change their behaviour to avoid paying more tax.
Treasury officials concluded that non-doms could avoid higher taxes by using more “tax planning”, by becoming a non-resident for tax purposes or by leaving the UK “completely”.
Mark Davies, of the tax advisers Mark Davies & Associates, said: “Many politicians have a very insular view that the UK is the only place in the world to live, and indeed it is a wonderful place, but they forget that non-doms are not British. Many may be Anglophiles to be sure, but they do not see the UK as their permanent home. They will either engage in tax planning to restrict their personal income and gains, or they will simply leave the UK.”
Graham Aaronson, QC, who has advised the government on combating tax avoidance, said Mr Osborne should have abolished the non-dom status and replaced it with new rules for temporary UK residents. “It is a shame that they didn’t reflect a bit further and come up with a proper statutory code for non-permanent residents,” he said.
Read the original article in The Times here.