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Eversheds comment: Annual charge approach to UK non doms needs revisiting

  • United Kingdom

    08-04-2015

    Commenting on the UK Labour party's proposal to scrap tax benefits for non domiciles in the UK, Ben Jones, partner and tax expert at law firm Eversheds, says:

    “The UK’s non-domicile tax rules have become increasingly hard to justify or rationalise in the modern, global economy. Labour’s plans to abolish non-dom status are the logical continuation of the (albeit slow) changes that have been made to the non-dom rules under both the current Coalition government and the previous Labour government.

    "The approach to date has involved imposing an annual charge on non-doms. The problem with this approach is that this charge is tiny compared to the benefits of non-dom status and certainly does not raise any significant revenue for the UK exchequer. Arguably therefore, given the current public and political climate on tax matters, this annual charge approach to non-dom status is just not appropriate. However, this is not a clear-cut issue. There are strong arguments that the presence of non-doms does benefit the wider UK economy and it is difficult to determine what impact Labour’s politically-motivated change might ultimately have on the economy."

    Ben Jones, Partner

    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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