Domicile – and the fear it can cause

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How is this tax change marketed to the people? Everything I read says: "Rich foreigners who don't now pay taxes will have to start to pay like everybody else". This is very much the same kind of talk that there was in Nazi Germany in the 1930s. The Nazis falsely claimed that Jews (all of whom were rich bankers and foreigners according to them, of course) did not fight in WW1 for Germany and in other ways did not contribute. In the UK now, most non-domiciled people do pay taxes but they are not rich (just like all Jews were not rich).

As far as I can see, this is not about "opting for non-domiciled status" because domicile is based largely on where your father or you were born. Thus, practically every foreigner in the UK is non-domiciled by default. And, changing domicile is difficult according to Inland Revenue documents on the internet and there are no clear rules. If the Inland Revenue will lose £30,000 each time that someone becomes domiciled, it is likely to become more difficult still.

Conclusion: only the rich foreigners will be able to pay up but a lot of poor foreigners (perhaps from Eastern Europe) won't be able to and will have to leave the country after 7 years. I believe that this is the desired outcome by the government. Just the same as when the Nazis imposed laws against the Jews in the 1930s in Germany so that they would choose to emigrate, as they were considered to be undesirable people.

I think this comment represents a genuine concern. It is exacerbated by some ridiculous comment that has been made that seems to imply a non domiciled person will have to pay this charge.

Let me make it clear: that is not true. Paragraph 5.80 of the PBR says:

from April 2008 resident non-domiciles who have been in the UK for longer than seven out of the past ten years will only be able to access the remittance basis of taxation on payment of an annual charge of £30,000, unless their unremitted foreign income or gains are less than £1,000

In other words, the payment is made by those wanting access to this tax rule. If a non-domiciled person does not want to use this tax rule they need not: they then pay tax in the UK on their world wide income like all domiciled UK people.

But underlying the comment is fear of being discriminated against, and quite right too. This legislation is discriminatory and it is illegal under the Race Relations Act as amended in 2003. The government just does not want to recognise that fact. So much for its principles.

I am sorry for those for whom this will cause concern. Abolition would have created the level playing field most people want when they come here. Why do we have to discriminate for the rich?

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