Tax  

UK Non-dom rules must be simplified for 'everyone'

“Right now there’s a lot of pressure to change the non dom rules - and we could just do what we’ve done before which is overlay another level of complexity on top of it. 

“Let’s not do that.”

However, Tim Walford-Fitzgerald, partner at accountancy firm HW Fisher said in reality the practical impact of the announcement is limited.

“The complexities and interactions of the modern world, coupled with more traditional considerations such as family stability, mean that the remittance basis still has a place in the UK tax system and limiting its scope below the current 15 years risks overlooking the human element in the decision making process.”

He added that it won’t just be the very wealthy who are affected.

“Many more modest individuals are not domiciled in the UK and the automatic remittance basis allows them to leave their savings in their home country without the requirement to certify UK residence, limit the withholding taxes applied on their investments and report the income in the UK.”

Neidle disagreed, saying we’ve had a ‘natural experiment’ in what happens when non-doms are restricted over the last 12 years or so as there have been a number of changes to the policy.

He said while there has been an exodus following the financial crisis and Brexit, there hasn’t been a visible fleeing as a result of any of the changes to the tax itself.

“[Another point is] where would they go? Where would people want to live as much as the UK that gives you benefits as good as the non-dom ratio?

“That’s not an easy question to answer. I don’t think people are solely driven by tax rates.”

sally.hickey@ft.com