According to Treasury documents unearthed back in 2010, almost five million people could pay less tax by demanding to be treated as a non-dom
If You Think Claiming Non-Dom Status Is For The Super-Rich, Think Again
Non-Dom Status: Do You Qualify?
Non-dom status was introduced in 1799 to shelter those with foreign property from the UK’s wartime taxes. Nowadays, non-dom status is largely only claimed by wealthy individuals. But they represent a tiny fraction of the number of people who could be eligible to benefit from this generous tax break.
The general message is that if you were born in the UK to a UK father, it's very unlikely you're going to be able to benefit from the special treatment available to non-doms. But if you or your parents have come to this country from overseas, you may be missing out if you're not already claiming non-dom status on your tax return.
If you think you might be eligible, it's worth looking at the Government's website on non-dom residents.
The Non-Dom Issue Throws Up Financial And Ethical Issues
It's been calculated that scrapping non-dom status will cost the economy a net £2.1 billion. The debate centres around how much extra tax can be levied, balanced against the fact wealthy people might instead to a more tax-friendly country, costing Britain money.
According to the latest figures, in the 2012/13 tax year, more than 113,000 people in the UK claimed non-dom status. The list is packed full of wealthy celebrities, sports people and well-known figures in public life. It includes MPs who have given up their political careers to retain their non-dom tax break. And it also includes MPs who have given up their non-dom status to continue in politics. This, however, is much less than 1 per cent of the people that could potentially claim non-dom status and save tax.
Many of the high profile people on the above list are proud to let everyone know they're British. But behind closed doors, when it comes to paying tax, arguably their ethics are called into question as they seek to pay much less than their fair share.
In a world in which apparently ‘we’re all in it together’, some aren’t quite in it as much as others. Whilst there’s agreement from all colours of the political spectrum that after more than 200 years, it’s time to get rid of the anomaly of the non-dom situation, just as many people are suggesting it should remain.
The non-dom issue is certainly an interesting debate, as you can see in the video below. A conservative MP appears to change her mind during the discussion. And this follows Ed Balls' earlier comments directly contradicting Ed Miliband's recent announcement. Below the video is a snapshot of recent opinions on the non-dom situation from the online press.
What Is A 'Non-Dom' And Why Are They Allowed To Avoid Paying Certain Taxes?
Labour has promised to scrap the loophole which is used by wealthy foreigners to reduce their UK tax bill. Labour has pledged to get rid of "non-domicile" status and estimates this will raise hundreds of millions in extra tax revenue. But what actually is a "non-dom", and why are they currently allowed to avoid paying certain taxes?
Daily Mirror on non-dom.
The Madness Of King George III’s Non-Dom Tax System
This egregious situation lets the wealthiest enjoy privileges without paying their fair dues. Much has changed in the world since William Pitt the Younger was prime minister and the United Kingdom was at war with Napoleon. But among the tax rules laid down by Her Majesty’s Revenue and Customs there remains a fiscal echo of those vanished days.
Financial Times on non-dom.
Scrapping Non-Dom Tax Status Would Hit Bank Chiefs
Bank of England governor and top UK bankers would be hit by Labour plans to abolish non-dom status. The Bank of England has been forced to defend Mark Carney's tax status after it emerged that the governor is one of the 115,000 people Labour is targeting under plans to scrap "non-dom" rules.
The Telegraph on non-dom.
Ed Miliband: Labour Will Scrap Non-Dom Tax Status
Labour leader will say 18th-century rule is morally wrong as it suggests ‘anything goes for those at the top’ – but he stops short of blaming non-doms directly. Ed Miliband will promise to end a colonial-era symbol of inequity in the tax system by announcing that, if he wins the election, he will abolish the non-domicile rule that allows many of Britain’s richest permanent residents to avoid paying tax in the UK on their worldwide income.
The Guardian on non-dom.
Squaring The UK’s Non-Dom Tax Circle
Britain’s treatment of its so-called “non-doms” gives some rich people an unwarranted tax break. If they qualify as being “domiciled” abroad, even if they live in the UK permanently, they can pay tax only on income generated in Britain. Britons usually have to pay tax on their global incomes.
Reuters on non-dom.
Please Share This
If you’ve found this page of interest, please would you kindly send a link to it to your friends and colleagues using the buttons below. You’ll be helping us out, and they might appreciate it too. Thanks, it's much appreciated.
AJ Bell Is The Best Value SIPP For Stockmarket Assets
Over time, charges can wipe out a huge part of your fund. We like AJ Bell because there are no set-up costs. If you hold passive funds, which is our preference, or shares, investment trusts, EFTs, gilts or bonds, you pay one small fixed fee no matter how large your fund. And when you come to draw your benefits either as occasional drawdown or UFPLS payments, there's a small charge for the whole year no matter how many times you access your money (many SIPP and SSAS providers charge more than this for each payment).
Get SIPP And SSAS Insights Direct To Your Inbox every Monday (It's FREE!)
As SIPPclub neither advises on, nor arranges, nor recommends specific investments or strategies, we're unable to say whether a SIPP or SSAS or any investment within it is right for you. Ultimately, it’s your money and your decision, and you should only proceed once you're satisfied you've undertaken sufficient due diligence. If you need advice, you should speak to your trusted adviser, or you could find a local adviser from Unbiased.co.uk. Alternatively, we'd be pleased to introduce to a suitably qualified independent financial adviser.
Please read our full Terms which includes criteria for SIPPclub membership.