Non-domiciled UK residents paid £178m in levies for excluding their overseas income from UK tax in the year to 2012, the largest amount raised from the tax charge since it was introduced in 2008, according to figures from Vestra Wealth say Harris & Co accountants Northampton
The wealth management group says the total paid by nearly 6,000 wealthy foreigners living in the UK rose by 6% and brought in an additional £10m for HMRC.
The Treasury has recently raised the annual charge from £30,000 to £50,000 in the 2012-13 tax year, for those living in the UK for at least 12 years. It estimates the increased tax charge will apply to around 3,500 non-doms.
Jenny Tozer, chair of the investment committee at Vestra Wealth, suggested this would not result in non doms leaving the country, given other factors such as the UK’s relatively low level of property taxes for foreigners compared to other European countries.
‘Most clients see it as a “rent” for the privilege of being in the UK but, given the other advantages of residence, a price generally worth paying. Many non doms are entrepreneurs. Allowing them to bring in money to fund businesses and create jobs is a very pro-business policy. This has undoubtedly persuaded many of the value of the UK as a base,’ Tozer said.
The number of people who applied for non-dom status increased by 7,000 to 123,000 in the year to 2011-12, the highest number since 2008-09. Only a small proportion opted to pay the charge, with most calculating that the tax savings from excluding their foreign income from UK taxation would be less than the cost of the charge.