UK non-dom tax breaks to go under Labour rule
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Ed Miliband today announced that the non-dom status which is used by some British citizens to avoid paying tax will be abolished, if Labour wins the General Election in May.
The non-dom status is a legal way for foreign nationals to earn an income abroad, but avoid paying tax in the UK.
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The approach is designed to stop those who call the UK “home” taking advantage of tax breaks, and ensure they pay UK tax on all their income, wherever it is earned.
The rule, which was introduced in 1799, allows people to claim a non-dom status if they are classed as a hereditary non-dom – for example if their grandfather was born outside of the UK.
In 2008, Labour introduced a levy of £30,000 for those wishing to claim the status and have lived in the UK for seven of the last ten tax years.
While Labour claims the move could raise as much as £1bn, it is still unclear of what the overall impact will be, and whether it will encourage wealthy non-doms to move abroad and become a barrier for those considering investing in the UK.