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 05 July 2008 23:19 BST

Chancellor changes non-dom tax proposals

Wednesday, 13 Feb 2008 13:39
Alistair Darling wants to close the non-dom tax loophole

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Alistair Darling has changed the government's proposals to tax foreigners domiciled in Britain after pressure from business leaders.

Dave Hartnett, head of the Treasury, sent a letter to businesses clarifying the government's plan to levy a charge of £30,000 on non-domiciled residents - so called 'non-doms' - who have lived in Britain for seven years.

Businesses were told there was no intention to tax so-called non-doms on foreign income or gains not sent to the UK, and tax on offshore trusts would not apply retrospectively.

The Confederation of British Industry (CBI) welcomed the changes.

John Cridland, CBI Deputy director general, said: "It was not just a tax on the 'super-rich' but affected tens of thousands of accountants, lawyers and managers who work hard in the UK and help generate huge amounts of wealth for the economy and the Treasury."

The CBI said non-doms paid over £7 billion in UK taxation last year and the extra tax would risk the £16.6 billion that non-doms spend here each year.

By declaring their main residence as outside the UK, non-domiciled residents can avoid tax on overseas earnings, a loophole the Treasury is keen to close.End of story


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