A peerage? I'd rather give it back and cut my tax bill

For some people, to be granted a peerage is the peak of a lifetime's ambition, a hard-earned entry to the most exclusive club in London. There is the honour of a title, the intellectual stimulus of debating with colleagues more knowledgeable and more polite than the MPs next door, the fun of dressing up, and the perks. With membership goes access to free parking bang in the centre of London, subsidised bars and dining rooms, and an immense library.

But for a handful, there is something more important than the perks and prestige: their bank balances. In the past few days, four peers have formally renounced their membership of the House of Lords, because if they had stayed they would have to pay UK tax on all their income. The four are "non-dom" for tax purposes, but a new rule that comes into force today, under Labour's Constitutional Reform and Governance Act, says there is no such thing as a "non-dom" peer or MP. His lordship might claim that his main home is in Timbuktu, or on the planet Zog – it makes no difference; when the taxman comes to call, being a member of either of the Houses of Parliament makes him liable to pay his full whack as if he were a UK resident.

When the law was introduced by the former justice secretary Jack Straw, it was widely seen as being aimed at Lord Ashcroft, the man who bankrolled the Conservative Party during the lean years after 1997, and masterminded its election strategy in marginal seats in the last election from an office close to David Cameron's at Conservative HQ. After years of speculation about whether he is a UK resident, Lord Ashcroft revealed just before the election that he has been a "non-dom" for years, saving himself vast sums that he would otherwise have had to pay in UK taxes.

But his place in the Lords means so much to him that he is prepared to stay and be taxed as a UK citizen.

Just before the general election he informed the Lords authorities that he was no longer chief executive of BCB Holdings, which runs the principal bank in the former British colony of Belize.

Lord Paul, a wealthy Labour peer, has also indicated that he would rather surrender the tax advantage he gets from being a "non-dom" than give up his seat. But three Tory peers and one crossbencher have other priorities.

One is Lord Laidlaw of Rothiemay, who has lived in Monaco for years. He filled the tabloid press two years ago when he sought treatment for "sex addiction" after details had emerged of a party he had hosted in a Monte Carlo hotel with male and female prostitutes. He gave £3.48m to the Conservatives in 2007, the largest individual gift to any political party that year.

Alistair McAlpine, a member of the family that owns the construction firm, served as treasurer of the Conservative Party for the entire 15 years that Margaret Thatcher was Tory leader, but quit the party after her downfall to join the Referendum Party. He has since rejoined.

A crossbench peer, Baroness Dunn, who comes from a wealthy Hong Kong family, will also resign. She was a member of the Hong Kong executive council for 13 years, when it was still a British colony, preparing for the handover of power to China. She was awarded a peerage by John Major in 1990.

Raj Kumar Bagri, 79, a Tory peer, was celebrated as one of the country's most successful Asian businessmen during the nine years when he was chairman of the London Metal Exchange. Yesterday, he became the fourth peer to announce that he would quit.

So, for those four peers, it is goodbye to the ermine, goodbye to the most exclusive club in Britain, but at least their fat bank balances will not suffer.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA celebration of British elections
Voices
Ed Miliband and David Cameron are neck and neck in the polls
election 2015Armando Iannucci: on how British politics is broken
News
i100
Life and Style
Great minds like Einstein don't think alike
tech
Arts and Entertainment
Billie Piper as Brona in Penny Dreadful
tvReview: It’s business as usual in Victorian London. Let’s hope that changes as we get further into the new series spoiler alert
Life and Style
A nurse tends to a recovering patient on a general ward at The Queen Elizabeth Hospital in Birmingham
health
News
science
Arts and Entertainment
No Offence
tvReview: No Offence has characters who are larger than life and yet somehow completely true to life at the same time spoiler alert
News
Chuck Norris pictured in 1996
people
Arts and Entertainment
Sarah Lucas, I SCREAM DADDIO, Installation View, British Pavilion 2015
artWhy Sarah Lucas is the perfect choice to represent British art at the Venice Biennale
News
A voter placing a ballot paper in the box at a polling station
i100
News
people
  • Get to the point
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: IT Support Engineer - Leeds

£22000 - £25000 per annum: Ashdown Group: IT Support Engineer - Leeds This i...

SThree: Trainee Recruitment Consultant - Bristol

£18000 - £23000 per annum + Uncapped OTE: SThree: SThree Trainee Recruitment C...

SThree: Trainee Recruitment Consultant - Birmingham

£18000 - £23000 per annum + Uncapped OTE: SThree: SThree Trainee Recruitment C...

SThree: Trainee Recruitment Consultant - Dublin

£13676.46 - £16411.61 per annum + OTE: SThree: SThree Trainee Recruitment Cons...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power