“Costing Britain”
In an interview earlier this year, shadow chancellor Ed Balls seemed to contradict his party leader’s proposal. “It’s important that non-dom rules work in a fair way and I think we should be tougher,” he said. “But I think if you abolish the whole status then it would probably end up costing Britain money because some people then leave the country.”
Canada Life International has taken a positive spin on the proposal, suggesting Labour’s proposal increases the scope for UK inheritance tax, as all residents of the UK would pay tax in the same way irrespective of domicile.
Managing director of the Isle of Man-based firm, Sean Christian, said: “UK residents would then pay UK inheritance tax on their worldwide assets, irrespective of how long they have been in the UK – this would highlight more than ever the need for effective estate planning.”
“Inconvenient truth”
However, Iain Tait, head of London & Capital’s private investment office, criticised the non-dom pledge. He said it “seemed extraordinary” that neither political party has clear data on the impact on tax revenue generated or lost by ending the ability to claim the non-dom basis, and argued that it was not a serious consideration for the Labour party.
“Labour refers to ‘hundreds of millions’ in additional tax take but this is ‘finger in the air’ guess work,” he said.
“One of the great aspects of the UK is our competitiveness and how successful we are at attracting successful people globally.
“It’s an inconvenient truth but this country needs progressive, forward-thinking people to drive the economy. We must ensure that we do not cut our nose off to spite our face.”
