You shouldn’t be a non-dom and an MP

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The Guardian reports:

Zac Goldsmith, the prominent environmental campaigner and Tory parliamentary candidate, was tonight forced to deny opposition claims that he had "dodged" paying taxes in Britain.

As it notes:

Goldsmith, who is standing in the key marginal seat of Richmond Park, west London, confirmed that he retained the non-domiciled tax status inherited from his billionaire father, Sir James Goldsmith. He said he had derived "very few" benefits from being a non-dom and had already decided to give it up.

British citizens with interests abroad can register for non-domiciled status, meaning they do not pay tax on earnings made outside the UK.

Although his father was Anglo-French, Goldsmith grew up in Britain. The bulk of his inheritance remains in a Cayman Islands-based family trust which bought his UK homes, in Richmond and Devon, where he farms organically. In his statement, Goldsmith said he paid UK income tax on UK-generated income.

After consulting his accountants, PricewaterhouseCoopers, Goldsmith, 34, said: "My annual tax returns are all signed off by the Inland Revenue and there are no outstanding matters between us … despite having been non-domiciled because of my father's tax status, I have always chosen to be tax-resident in the UK."

There are three things to say. First, you basically can’t claim non-domiciled status unless you have tax reason to do, so he is bound to get benefit. Second, if the trust from which he benefits is discretionary (and I have little doubt it is) then his statement is true and completely misleading at the same time: he gets no benefit from his non-dom status but the fund from which he benefits is clearly abusive. And third, there is no way in which Goldsmith can be an MP and be non-domiciled. How can anyone say the UK is not his natural home, his allegiance is elsewhere, and use that to avoid tax, and then want to be an MP supposedly upholding our tax system and holding our executive to account?

One of the essential reforms that are long overdue with regard to our tax system is the abolition of the domicile rule, something for which I have long campaigned. Another long over due change is that all MPs and Lords should be deemed domiciled and fully tax resident in the UK.

I’d suggest Darling puts it in the pre-Budget report. it’s a vote winner.