The UK government has been accused of bowing to pressure from the ultra high net worth foreigners who live in the UK after it clarified plans to issue a £30,000 annual charge for non-doms.
In the 2007 Pre-Budget Report, published in October last year, the government proposed the introduction of a £30,000 annual charge for non-doms who have lived in the UK for more than seven years who want to carry on using the remittance basis. Following concerns that this measure would push wealthy foreigners out of the country, the treasury has now said that non-doms will not have to disclose information about their incomes abroad if they pay the remittance.
Ultra high net worth individuals who will be affected by these plans include Lakshmi Mittal, owner of steel giant ArcelorMittal, Hans Rausing, whose family founded packaging firm Tetra Laval, and Charlene de Carvalho-Heineken, who owns a 25% stake in the brewing firm.
Depsite the Trades Union Congress protesting that it is "simply not convinced many wealthy or talented individuals would leave the UK as a result of these minor tax changes", research carried out by The Society of Trust and Estate Practitioners shows that a third of wealthy non-doms are planning to leave the country as a result of government tax plans. (To read more on this research, click here.)
The government's consultation on changes to the tax rules on residence and domicile closes on 28 February.