The legal status of non-doms
British citizens with financial interests abroad can register for ‘non-domiciled status’ and are known, in shorthand, as ‘non-doms’. Non-doms are resident in the UK but do not pay tax on their earnings outside the UK. There are around 116,000 residents registered as non-doms in the UK; these people largely work in finance, though there are also some tycoons and professional sportsmen registered.
Non-doms have recently come under a variety of different pressures from the government including the introduction of a £30,000 levy because of their status. Although the £30,000 levy does not have to be paid, failure to pay it means that tax must be paid on all income including overseas income. Additional rules, such as that non-doms are not able to use overseas trusts to conceal earnings from the government have also been introduced.
Many people disagreed with the changes to the tax laws relating to non-doms, saying that unfavourable changes could encourage investors and businessmen to leave the UK to live in places with more favourable tax laws. Conversely, many people believe the rules relating to non-doms are unfair in that they are afforded tax breaks above UK citizens. Countries such as America require all income to be taxed regardless of whether it is earned inside or outside the country. People with non-dom status should take tax advice from an international tax firm to assist them with tax planning, particularly as the Conservative party has formulated proposals for changes in inheritance tax laws that would be highly unfavourable to non-doms. These would naturally come into effect if there was a change in government and the proposals were upheld.
If you would like to obtain legal advice on non-domiciled status, or any related issue, Caven can put you in touch with a local specialist tax solicitor free of charge. So, if you have any questions or would like our help in finding tax solicitors please call us on 08001 221 2299 or complete the web-form above.
- Last Updated on 18/10/2012