'Closing tax loophole would lead to exodus of wealthy'
Friday 06 September 2002
Opposition is mounting to Government plans to close a tax loophole that allows thousands of wealthy UK residents to pay a pittance to Inland Revenue.
The Treasury is looking at drawing non-domiciled UK residents – people who live in Britain but claim another country as their homeland – further into the tax net.
It is expected to publish a consultative document in November that could propose limiting to five years the length of time a foreign national could claim the status.
Currently non-domiciled residents do not have to pay any income or capital gains tax on assets held overseas. It is estimated to cost the Exchequer about £1bn and benefit 60,000 people, most of whom shy away from publicity.
But the Baltic Exchange, the London market for shipbrokers, has warned it will trigger an exodus of foreign shipowners. It said a study commissioned from a Cambridge academic showed a potential loss of 4,500 jobs, £125m in tax revenue and £375m in maritime earnings.
John Buckley, its chief executive, said: "If the long-standing benign arrangements for foreign shipowners were altered, maritime London and the economy generally would face a very serious threat."
Tax experts said the effect could be widespread. Paul Knox, director of private client services at Ernst & Young, said the rule had been a "fundamental tax principle" for years.
"A change in the rules without giving proper thought to the overall impact could switch the UK from being a flexible place for foreigners to spend time to being one of the most disadvantageous places and the ramifications could be quite significant," he said.
A Treasury spokesman said: "We are aware of the views of some groups in the shipping industry but ... the rules should be fair, easy to operate and support the competitiveness of the British economy."
- 1 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 2 Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
- 3 Amal Clooney gives excellent answer to fashion question at European Court of Human Rights
- 4 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 5 Isis publicly behead man in Syrian town square for 'insulting Allah' as he screams for help
Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
Amal Clooney gives excellent answer to fashion question at European Court of Human Rights
Sir David Attenborough interview: The one question about life that still baffles him
Isis publicly behead man in Syrian town square for 'insulting Allah' as he screams for help
One spelling error costs Companies House up to £9 million after being sued for ruining business
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
9 reasons Greece's experiment with the radical left is doomed to failure
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...