Non-Dom Ban Will Create £430 Million Loophole – Labour

Instead,
he
said
this
would
be
replaced
with
a
“modern,
simpler
and
fairer
residency-based
system”,
with
the
resulting
£2.7
billion
a
year
raised
from
scrapping
the
special
status
put
towards
tax
cuts
for
those
on
lower
incomes. 

Under
the
new
system,
anyone
who
has
been
a
tax
resident
in
the
UK
for
more
than
four
years
would
have
to
pay
tax
on
their
foreign
income
and
other
gains.

Ministers
are
also
consulting
on
changes
to
inheritance
tax
for
wealthy
foreign
UK
residents,
but
the
Treasury
has
said
non-UK
assets
placed
into
an
overseas
trust
by
April
2025
will
not
be
in
the
scope
of
inheritance
tax
at
all.

Labour,
which
had
long
called
for
the
non-dom
status
to
be
scrapped,
has
claimed
this
provides
a
loophole
in
the
government’s
proposals.
Its
own
analysis
suggests
this
would
be
worth
£430
million
in
additional
tax
to
the
exchequer.

Shadow
Treasury
minister
James
Murray
has
written
to
the
government
asking
questions
about
the
new
rules
for
assets
placed
into
overseas
trusts.

Among
his
questions,
Murray
asks
whether
the
prime
minister
Rishi
Sunak,
his
family
members,
or
their
representatives,
had
been
involved
in
conversations
about
the
scheme.

Murray,
Labour’s
shadow
financial
secretary,
says:
“it
has
taken
years
for
the
Conservatives
to
u-turn
–
to
finally
drop
their
opposition
to
abolishing
the
non-dom
status
and
follow
Labour’s
lead.

“However,
buried
in
the
small
print
of
Rishi
Sunak’s
non-dom
plan
is
a
£400
million-a-year
loophole
that
will
benefit
some
of
the
wealthiest
people
in
Britain.

“At
a
time
when
taxes
on
working
people
are
set
to
be
their
highest
in
70
years,
and
our
public
services
are
their
knees,
voters
will
rightly
be
asking
why
once
again
it
is
one
rule
for
them
and
another
rule
for
everybody
else.

“The
Tories
need
to
come
clean
about
this
gaping
loophole
in
their
non-dom
plan
and
guarantee
to
the
British
public
that
people
who
make
their
home
here,
pay
their
taxes
here
too.”

Labour
has
its
own
history
of
embarassment
on
the
issue
of
non-dom
status,
however.

At
the
2015
election,
the
party
pledged
to
scrap
the
status,
but
when
then-shadow
chancellor
Ed
Balls
went
on
the
air
to
defend
the
policy,
he
was
confronted
with
evidence
of
a
radio
appearance
months
earlier
in
which
he
had
argued
enacting
the
policy
would
not
lead
to
higher
tax
revenue.
At
the
time,
it
changed
the
tone
of
the
election
campaign.
Balls
went
on
to
lose
his
seat. 

A
Treasury
spokesperson
says:
“the
government
will
abolish
the
current
tax
system
for
non-doms
and
replace
it
with
a
modern,
simpler
and
fairer
residency-based
system
–
using
the
revenue
to
cut
taxes
on
working
people.”

Source:
AP

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