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Tax gains from changes to UK non-dom status questioned

Tax gains from changes to UK non-dom status questioned
Advisory firm Moore Stephens says it is “unclear” where GBP1.5bn ($2.3bn) in expected tax revenues from changes to the UK’s non-domiciled (nom-dom) status will come from.

Under changes proposed in the UK chancellor George Osbourne’s budget on Wednesday permanent nom-dom status for those resident in the UK for more than 15 years would be deemed domiciled for tax and capital gains purposes.

“This means that the recently introduced GBP90,000 remittance basis charge (RBC) for residence of more than 17 out of 20 tax years will not apply from 2017/18, as individuals will now be deemed domiciled at that point,” said Gill Smith a tax advisor at Moore Stephens.

However, it was questioned where the expected GBP1.5bn in extra tax revenue from these changes would actually come from if it simply meant wealthy nom-doms left the country.

“It has been claimed that the proposed changes will generate GBP1.5bn in tax revenues annually, but it is unclear where the figure of GBP1.5bn comes from. If the non-doms leave, 45% of nothing is still nothing,” she said.

“Moreover, non-doms are likely to leave the UK despite the Chancellor acknowledging the contribution they have made to the economy.”

Nom-dom status has been popular with shipowners, including the Greek shipping community.

“Clearly, these proposed changes could have a significant impact on large numbers of non-doms in the shipping industry. But it is important not to panic,” Smith said.