Rich ‘Non-doms’ to flee UK after tax hike
Being a non-taxpaying foreigner in Britain has just got a whole lot harder. The UK Government has announced that non-domiciles will have to pay a flat tax rate of around $US 60,000 a year on foreign assets. For the extremely wealthy, like Russian billiona
From next month anyone who has claimed the non-dom status for seven of the past 10 years will have to pay 30 000 pounds a year to retain the privilege.
An estimated 200,000 people live and work in Britain but also have financial and business interests abroad.
Julie Meyer, an American in the UK, believes it will anger a lot of people. From now on she will have to pay UK tax on any foreign earnings.
“It's the principle. It’s not the 30,000. Tomorrow it could be 300,000. It is the principle of ring-fencing income which is made outside of the UK. So, if I have something which predates my involvement in the UK, it has nothing to do with the fact that I currently live and work in the UK. And for that to fall under the jurisdiction of the UK seems absurd to me,” she said.
Many say the levy is unfair and as a result some of them will leave the country in favour of other tax heavens. This, in turn, will have a knock-on effect on the economy.
It’s doubtful the tax refugees will include the likes of Britain’s wealthiest man Lakshmi Mittal or Chelsea FC’s owner Roman Abramovich. For them – 30,000 pounds a year is pocket change.
However, for those who earn around 200,000 pounds a year it does make a difference.
There is the view that the new tax is a government plan to please the public, as Quentin Peel, international affairs editor at Financial Times says.
“People start looking around at the very wealthy and saying why aren’t they paying their share of taxes to live in this country. Why should they be so well treated when they are far richer than any of the rest of us? So from a political point of view, I can see that there is real political mileage in trying to do something about this,” Peel said.