Brexit and Labour ‘drive out’ super-rich non-doms

Image copyright
Getty Images

Image caption

The UK’s super-rich are moving offshore

The number of super-rich residents who pay no UK tax on their offshore accounts has fallen to its lowest level ever, according to Treasury figures.

Last year, there were 78,300 non-domiciled taxpayers (non-doms) in the UK compared with 98,500 in 2016-17.

And the £9.5bn they paid to the taxman in 2016/17 fell to £7.5bn last year.

International law firm Pinsent Masons says the reason is Brexit and nervousness over the chances of a Labour government.

Josie Hills, senior tax manager at Pinsent Masons, said: “Brexit uncertainty is driving out many of the wealthiest non-doms who are not prepared to hang around to find out the outcome.”

Most non-doms are wealthy UK residents whose permanent home, or domicile, is outside of the UK.

They pay a “non-dom levy” (a remittance basis charge) of between £30,000 and £60,000, which allows them to pay no tax on offshore income and capital gains, unless the money is brought into the UK.

Revenue from that levy was £315m last year.

‘Unappealing’ Labour

Mr Hills said: “The prospect of a Labour government is also very unappealing for high net worths – talk of monetary controls and wealth taxes are not well received. Given that there could be a general election in the near future, many will not be willing to take the risk that this becomes a reality.

“Non-doms make a huge contribution to HM Treasury’s coffers; this small group has contributed £45bn in tax over the last five years. The impacts of falling tax receipts from non-doms may only be felt once it’s too late.”

“The new ‘deemed domicile’ rules, which can draw non-doms fully into the UK tax net if simple conditions are met, may have also contributed to the drop in numbers. Non-doms are internationally mobile and if the UK is no longer an attractive place for them, then they can easily relocate.”.”

Be the first to comment

Leave a Reply

Your email address will not be published.


*