Economic Trade-offs for the next government

[Lootman]

Jeremy's revenge? The Beeb reported recently that Jeremy Hunt is thinking, at the last minute, about tinkering with / abolishing non-dom tax breaks, to pay for tax cuts for the rest of us*** in the budget. This cunning wheeze would have the effect of taking away some of the money that Labour, assuming they win the election, would use to finance their spending program, leaving the cupboard bare, as it was after the 2008 financial crisis.

Abolishing non-dom tax would allegedly raise £3.2 billion. That's about 60 quid each for the UK population, but this assumes that said non-doms would stay put in the UK if they had to cough up tax on their foreign earnings.

*** assuming you lot out there are not non-doms. If you are, come on, own up, would you leave?

According to the Telegraph the number of non-doms had dropped from 85,000 in 2015 to 55,000 in 2022, and probably has continued to drop since 2022. Since Hunt is facing certain ejection in November, he should tax the non-doms and use the money to reduce income tax. Then when Labour come in, and they have to jack up income tax, everyone will notice.

Yep, it is a cunning plan. And at the same time maybe abolish the entire concept of domicile so that non-dom spouses get the same IHT deal as other spouses?

[servodude]

Jeremy's revenge? The Beeb reported recently that Jeremy Hunt is thinking, at the last minute, about tinkering with / abolishing non-dom tax breaks, to pay for tax cuts for the rest of us*** in the budget. This cunning wheeze would have the effect of taking away some of the money that Labour, assuming they win the election, would use to finance their spending program, leaving the cupboard bare, as it was after the 2008 financial crisis.
Abolishing non-dom tax would allegedly raise £3.2 billion. That's about 60 quid each for the UK population, but this assumes that said non-doms would stay put in the UK if they had to cough up tax on their foreign earnings.
S
*** assuming you lot out there are not non-doms. If you are, come on, own up, would you leave?

What's to lose?
Increased tax take or increased emigration

Fair enough he'll face valid claims of stealing a policy from Labour (cos he has) but it'll keep some of the tribal throwbacks onside as they'll think it's a wheezy to trap the incoming other guys

[Gilgongo]

If you are, come on, own up, would you leave?

I thought most non-doms were domiciled in countries with only marginally lower tax than the UK (eg India). So if they "left" they'd not be able to have their cake and eat it. By which I mean tax isn't really the reason they're doing it?

[Lootman]

If you are, come on, own up, would you leave?

I thought most non-doms were domiciled in countries with only marginally lower tax than the UK (eg India). So if they "left" they'd not be able to have their cake and eat it. By which I mean tax isn't really the reason they're doing it?

It is true that a lot of places have similar or even higher rates of tax than the UK. Of the four other countries I did job contracts in, only Hong Kong had materially lower taxes than the UK. Even the US had similar taxes, if only because I worked in high-tax states (NY and CA).

But the thing with being a wealthy non-dom is that you can choose where to live. Many countries have favourable tax rates for the mobile rich, and may even give citizenship along with tax breaks.

And the last time I looked a non UK resident can spend up to 3 months each year in the UK without being considered resident and so liable for UK tax.

Not sure yet if we will leave the UK. A lot depends on what a Labour government will actually do as that is not clear yet.

[stevensfo]

I thought most non-doms were domiciled in countries with only marginally lower tax than the UK (eg India). So if they "left" they'd not be able to have their cake and eat it. By which I mean tax isn't really the reason they're doing it?

It is true that a lot of places have similar or even higher rates of tax than the UK. Of the four other countries I did job contracts in, only Hong Kong had materially lower taxes than the UK. Even the US had similar taxes, if only because I worked in high-tax states (NY and CA).

But the thing with being a wealthy non-dom is that you can choose where to live. Many countries have favourable tax rates for the mobile rich, and may even give citizenship along with tax breaks.

And the last time I looked a non UK resident can spend up to 3 months each year in the UK without being considered resident and so liable for UK tax.

Not sure yet if we will leave the UK. A lot depends on what a Labour government will actually do as that is not clear yet.

And the last time I looked a non UK resident can spend up to 3 months each year in the UK without being considered resident and so liable for UK tax.

Best to check. I seem to remember that just under 6 months was the cut-off point. i.e. the country where you spend most time was considered your tax residency. Though I guess it also depends if you divide your time simply between two countries, or more than two, and for how long.

The problems start when tax residency becomes confused with just 'residency', the latter being far more flexible than in most other countries. When I was looking at the gov.uk sites years ago for rules on N.I. top-ups, I spent ages reading about tax residency, tax-domiciled etc and the whole thing was a mess.

Steve