Taxing non-domiciles

Benedict Brogan's Daily Mail blog has an excellent time line through the non-domicile proposals. One revelation that he puts forward is that "George Osborne hopes to raise £3.5 billion by asking 160,000 non-doms to cough up £25,000 in exchange for a pledge that he will not try to tax their overseas income...But where did he get the idea? Step forward David Mills, one-time husband of Tessa Jowell, a regular in the Italian courts, and an expert on off-shore finances. Five years ago he suggested a £20,000 levy on non-doms." Is this true, can we find out?


Benedict Brogan also wonders if the election frenzy created by Gordon Brown is just froth designed to get the Conservative party to reveal its best proposals early enough for him, his non-partisan civil servants and the BBC to attack. "But here's something else to consider: remember Muhammad Ali's rope-a-dope trick? Let your opponent exhaust himself by revealing all his best shots? Some in Brown Central see an opportunity here. We all the talk of an election has put the pressure on the Conservatives. They've had to launch a crash election plan, and they have been forced to reveal plans that might otherwise have stayed hidden away until an election is actually called. If Mr Brown decides it's not time to go to the country after all, he will have the comfort of knowing that he now has months to pick away at the Tories and their tax package. It's too clever by half, surely, but I hear Labour folk quietly rubbing their hands, confident that they have the Tories where they want them - exposed." Quite possible, indded probable but I think the Conservatives will benefit from having to bring forward proposals , it gets rid of the "they have no policies" stories.


"What strikes me though is the scale of the Labour spin operation tonight, which is designed to turn a "Tories promise you tax cut" story into a "Tories rocked by funding row" tale. I have in my inbox a press release from the Labour Party Press Office, in which Alistair Darling, the Chancellor of the Exchequer, claims: "Today George Osborne made a £3.5 billion tax commitment. Treasury analysis shows it is impossible for him to raise the money he needs to pay for this commitment from his proposals on residence and domicile. Initial costings by the Treasury show that George Osborne's proposal would raise a maximum of £650m, leaving George Osborne at least £2.9 billion short. So George Osborne cannot afford the promises he is making. He cannot afford to cut inheritance tax." ...I look forward to hearing from the Treasury tomorrow why exactly its civil servants and this Government department are doing party political work to undermine another political party's conference." As I have said before, this Government has politicised the civil service to such a degree that they just accept that they work for the Government party rather than the Government of the Country.



Iain Dale has a nice long exposition of this story on his site as well. "Labour seem to be flailing around all over the place on George Osborne's Inheritance tax proposals. Alistair Darling claimed earlier today that the number of non-domiciles in 2008-09 will be below 150,000. He is simply wrong. Expert analysis cited by Accountancy Age and others shows that it is likely to be in excess of 200,000 following rapid recent growth"

"The Treasury's latest attempt to attack Conservative figures has spectacularly backfired tonight. Alistair Darling claims that only 15,000 non-doms have off-shore incomes over £60,000. This is not a figure the Treasury have ever given before. Indeed, on 30th April 2007 Ed Balls answered a question in Parliament saying the Treasury did not have such information.


"Estimates of the tax foregone in the UK as a consequence of the use of the
remittance basis by those not domiciled in the UK are not routinely made.
Information is not held on overseas income and gains that do not give rise to a
tax liability in the UK." (Ed Balls MP, Hansard, 30 Apr 2007, Column 1383W)

As Dawn Primarolo said this is because non-doms are not required to disclose this information: "In general, individuals do not have to inform HMRC of their foreign income or gains unless this is relevant to their UK tax liability." (Dawn Primarolo MP, Hansard, 8 Mar 2007, Column 2220W)."