A Bill for a new Act of Parliament was tabled in the UK this week. It's called the 'Disqualification from Parliament (Taxation Status) Bill' and says that those electing for the non-domiciled remittance basis of taxation will be disqualified from acting as an MP or Member of the House of Lords in future.
John Whiting of the Chartered Institute of Tax and PWC said of this
One can understand the driving force at work here but there is also an important matter of tax principle. A taxpayer will, under the proposed non-domiciled rules, be given an option over two bases of taxation. Yet someone choosing one route is, seemingly, to be handed an extra penalty. It does seem a bad precedent if making what might be regarded as the wrong tax choice attracts adverse treatment in another area.
Hang on John? Since when was the right not to pay tax 'a penalty'?
He's right; there is a matter of tax principle at stake here. But it seems like he can't spot what it is. The reality is that this law will say there's no right of representation in the UK without taxation. That's OK. That is a principle. What John espouses is not. He's talking about an abuse. That's not the same thing, not the same thing at all.
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It’s a lousy principle anyway. An even lousier principle is the one that says “no taxation right now, but we will catch you when you are dead; but in the meantime no representation either”.
Long term expatriates are now disenfranchised, let alone sitting in the Commons or the Lords (hard to imagine a long-term expatriate running for office anyhow), yet their natural domicile is deemed to remain unchanged and therefore their estates are plunderable. It’s a catch-22 that flies in the face of natural justice.
The Americans who fought a war of independence on this principle are taxed on their worldwide income whatever their residence status – but they can never be disenfranchised.