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Domiciled But Not Resident For Uk Tax

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Are we being taken for a ride by these overseas non UK residents, who are partly responsible for fuelling London's high property prices? Would the City suffer as a world leader if the rules were changed and is it being sustained, currently, by this low tax system? The article debates the issue.

"Welcome to London, the onshore tax haven" and "One rule for the super-rich, but another for everyone else".
Emotions run high on both sides of the argument. Critics claim the rules favour a wealthy, mobile elite, undermining the transparency and fairness of the tax system. The rules' defenders say their abolition would damage the prosperity of the UK by triggering an exodus of business people, driving away large charitable donors, increasing the employment costs of international UK-based businesses and jeopardising London's status as Europe's pre-eminent financial centre. They also argue that it is indeed fair that people who do not have a long-term connection to the UK should pay less tax to the exchequer.

http://www.ft.com/cms/s/4a5fc052-4935-11dc...00779fd2ac.html

:o:o:o

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Are we being taken for a ride by these overseas non UK residents, who are partly responsible for fuelling London's high property prices? Would the City suffer as a world leader if the rules were changed and is it being sustained, currently, by this low tax system? The article debates the issue.

http://www.ft.com/cms/s/4a5fc052-4935-11dc...00779fd2ac.html

:o:o:o

I am getting increasingly bored of the FT's lurch towards sloppy journalism. Am I missing something new in the law?

If you are resident but not domiciled your UK income and money you bring into the UK are subject to UK tax. How do you buy a house in the UK without either earning money in the UK or bringing it in? I confess I don't know the situation if you are non-domiciled and non-resident and buy a house here - but that is not the case discussed.

Also the quote on 1 grandparent is enough to claim non-domiciled status - what is new here under Gordon and Tony? 1 foreign grandparent neither entitles you to domicile of origin nor domicile of choice, your two key grounds - yes they can contribute to claim for non-domiciliary status but are not sufficient. Okay, perhaps there is some arcane loophole within a loophole - but that will hardly be the engine driving the London property market.

Let's not try and blame Johnny Foreigner for all our woes - I remember a great article in the Economist many years ago about the overblown focus on "Yardies" when white. middle-aged, English men controlled the majority of crime in this country. Look to the English VIs for this problem - not Polish labourers or itinerant Indian billionaires...........

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bucks hopeful

Something like 40/50% of Central London property purchases are by foreign nationals.

That figure is potentially market (and possibly economy) distorting.

It may be normal in somwhere like the Cayman Islands, but a captial city of millions of people, something is going on that is a quantum scale in difference.

What happens if they turn tail, or they effectively destroy the functioning of the local econoy by their current or future actions?

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bucks hopeful

Something like 40/50% of Central London property purchases are by foreign nationals.

That figure is potentially market (and possibly economy) distorting.

It may be normal in somwhere like the Cayman Islands, but a captial city of millions of people, something is going on that is a quantum scale in difference.

What happens if they turn tail, or they effectively destroy the functioning of the local econoy by their current or future actions?

While that number sounds high to me I bow to your judgement - however I think that is part of a separate debate. 40/50% of London property is not bought because of a domiciliary loophole in the tax regime. If you are suggesting there is a risk in attracting businesses through low corporation tax, low red tape approaches and that big business seems to have the key to the garden gate at Number 10 (to paraphrase Robin Cook) and that the German export economy is founded on something far more solid than ours - then I think we are in violent agreement ;)

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While that number sounds high to me I bow to your judgement - however I think that is part of a separate debate. 40/50% of London property is not bought because of a domiciliary loophole in the tax regime. If you are suggesting there is a risk in attracting businesses through low corporation tax, low red tape approaches and that big business seems to have the key to the garden gate at Number 10 (to paraphrase Robin Cook) and that the German export economy is founded on something far more solid than ours - then I think we are in violent agreement ;)

Well we are in disagreement then.

I see very little sign of real investment in anything other than a bit of property as a bolt-hole and slushing some funds into UK banks/invesment companies. Apart from that very, very little seems to be occuring investment wise - certainly directly in the real econom. We are also making enemies out of countries we will rely on for power - dumb move, however arguable the case is that we should supply a safe haven to every tax/political exile there is in the world.

As for Germany, give me a break, compare their huge trade surplus with our huge trade decifit - no argument to have whatsoever on that front. However their banking system seems to have turned anglo-saxon and appears increasingly disease-riddled.

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Well we are in disagreement then.

I see very little sign of real investment in anything other than a bit of property as a bolt-hole and slushing some funds into UK banks/invesment companies. Apart from that very, very little seems to be occuring investment wise - certainly directly in the real econom. We are also making enemies out of countries we will rely on for power - dumb move, however arguable the case is that we should supply a safe haven to every tax/political exile there is in the world.

As for Germany, give me a break, compare their huge trade surplus with our huge trade decifit - no argument to have whatsoever on that front. However their banking system seems to have turned anglo-saxon and appears increasingly disease-riddled.

Are you sure we are arguing - I think too many people are here in London because of silly salaries and bonuses, this in turn driving a silly property market in its own little positive-feedback loop - all built on sand rather than sound fundamentals.

As for Germany - do you mean Anglo American? I've had some great holidays in Saxony but that was Germany

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I am getting increasingly bored of the FT's lurch towards sloppy journalism. Am I missing something new in the law?

If you are resident but not domiciled your UK income and money you bring into the UK are subject to UK tax. How do you buy a house in the UK without either earning money in the UK or bringing it in? I confess I don't know the situation if you are non-domiciled and non-resident and buy a house here - but that is not the case discussed.

Also the quote on 1 grandparent is enough to claim non-domiciled status - what is new here under Gordon and Tony? 1 foreign grandparent neither entitles you to domicile of origin nor domicile of choice, your two key grounds - yes they can contribute to claim for non-domiciliary status but are not sufficient. Okay, perhaps there is some arcane loophole within a loophole - but that will hardly be the engine driving the London property market.

Let's not try and blame Johnny Foreigner for all our woes - I remember a great article in the Economist many years ago about the overblown focus on "Yardies" when white. middle-aged, English men controlled the majority of crime in this country. Look to the English VIs for this problem - not Polish labourers or itinerant Indian billionaires...........

You get taxed on income remittance not capital. So you can buy the house with capital you had offshore. If you have offshore income you use an offshore mortgage. The payments towards the mortgage are not regarded as remitted income as the mortgage is based offshore.

To avoid stamp duty is a bit harder, but you use an offshore company to buy it, my guess is this cost still the 3% stampduty. But when the next person buys it, it is a share transfer and that is free of stampduty.

I now millionaires make abuse of it. Only 200,000 people in the UK are registered as non doms. However for all imigrants no matter how rich or poor there are tax benefits in declaring yourself non dom for the tax office.

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Brits can have non dom benefits by emigrating to Ireland or Malta where they have similar rules. Plus some more excotic ones outside Europe.

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Are you sure we are arguing - I think too many people are here in London because of silly salaries and bonuses, this in turn driving a silly property market in its own little positive-feedback loop - all built on sand rather than sound fundamentals.

As for Germany - do you mean Anglo American? I've had some great holidays in Saxony but that was Germany

Erm, yes, Anglo/American banking models shouldn't really have called it Anglo Saxon when comparing to Germany ! :lol:

Bubbles seem to attract lots of everything - money and bodies.

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I am getting increasingly bored of the FT's lurch towards sloppy journalism. Am I missing something new in the law?

If you are resident but not domiciled your UK income and money you bring into the UK are subject to UK tax. How do you buy a house in the UK without either earning money in the UK or bringing it in? I confess I don't know the situation if you are non-domiciled and non-resident and buy a house here - but that is not the case discussed.

Doesn't quite work like that. The likes of Sir Philip Green take the P

http://www.taxresearch.org.uk/Blog/2006/06...-tax-avoidance/

If I were in the Inland Revenue, I would fret about the moment when the little people who stupidly still pay taxes realise that the state is treating them like fools. It insists that they must hand over their earnings on pain of punishment by the courts, while inviting Philip Green to Buckingham Palace to be honoured by the Queen.”

Now someone on another thread is boycotting an fish and chip shop because they employ immigrants, I don't agree with that, but I think it more effective to avoid the likes of BHS until these people start paying their taxes.

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Doesn't quite work like that. The likes of Sir Philip Green take the P

http://www.taxresearch.org.uk/Blog/2006/06...-tax-avoidance/

Now someone on another thread is boycotting an fish and chip shop because they employ immigrants, I don't agree with that, but I think it more effective to avoid the likes of BHS until these people start paying their taxes.

If you do, youll hurting other british families, get the idea ;) the only way is the other method.

you save your job and get a better wage.

Edited by crash2006

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Can I be non domiciled if I am a british national but born overseas. I live and work full time in the UK - am I being a fool by putting savings from my wages in a non offshore bank account? Savings rates are worse on offshore accounts so I suppose my interest taxed at 22% (or whatever it is) isn't alot different. What are the benefits of 'registering' as non dom? To be registered as non dom don't I need an overseas address in the country I'm declaring as my country of domicile?

<_<:blink:

My housemate is moving next month into a 2 bedroom house 'given' to his pregnant 19 yr old gf. Sod paying more tax than I need to in this country. :ph34r:

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You get taxed on income remittance not capital. So you can buy the house with capital you had offshore. If you have offshore income you use an offshore mortgage. The payments towards the mortgage are not regarded as remitted income as the mortgage is based offshore.

To avoid stamp duty is a bit harder, but you use an offshore company to buy it, my guess is this cost still the 3% stampduty. But when the next person buys it, it is a share transfer and that is free of stampduty.

I now millionaires make abuse of it. Only 200,000 people in the UK are registered as non doms. However for all imigrants no matter how rich or poor there are tax benefits in declaring yourself non dom for the tax office.

Thanks for that - though capital investment is a zero sum game for the revenue surely - UK dom and resident would presumably be holding capital net of CGT etc. so no tax liability attached to the capital (save tax in any interest).

If we are just talking one house then if it is used as a primary residence by UK dom and resident then no CGT liability therefore zero sum game again.

Equally if the house was let I presume the offshore company would effectively be trading in the UK and liable to corps tax on the rental business unless that could be arranged as some alternative transaction entirely offshore.

Presumably the big break you highlight in the offshore model is a non-dom would have no IHT liability on these shares or CGT liability if more than one property held?

Don't deny the wealthy can take best advantage of these loopholes and closing them should be considered - I just feel there is an amount of smoke-screening - blame somebody unpopular for our woes - this gets joe public annoyed and irrational and also contributes to the "new paradigm" supporting our bubble - i.e. London property prices will never stop rising because there is an endless supply of mega-rich foreigners driving up prices.

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http://www.theherald.co.uk/politics/news/d...1617882.0.0.php

Peer pledges to bankroll Labour’s election campaign

CATHERINE MacLEOD, Political Editor August 15 2007

Comment

The prospect of Gordon Brown calling an early General Election intensified yesterday as it emerged that a wealthy steel magnate is willing to fund Labour's campaign.

Lord Paul, who is thought to be worth around £450m, was a major donor to Mr Brown's recent leadership campaign and he has made it clear he will give the Prime Minister whatever he can afford to fight the next election.

....

He is non-domiciled in the UK for tax purposes.

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Can I be non domiciled if I am a british national but born overseas. I live and work full time in the UK - am I being a fool by putting savings from my wages in a non offshore bank account? Savings rates are worse on offshore accounts so I suppose my interest taxed at 22% (or whatever it is) isn't alot different. What are the benefits of 'registering' as non dom? To be registered as non dom don't I need an overseas address in the country I'm declaring as my country of domicile?

<_<:blink:

My housemate is moving next month into a 2 bedroom house 'given' to his pregnant 19 yr old gf. Sod paying more tax than I need to in this country. :ph34r:

Yes you should register with the tax office for being Non domicled. I have done this last year. Look for the DOM01 form an the HMRC website. You can have the intresest on offshore savings gross. Best is not to remit your interest to the UK but keep the interest in a seperate income offshore account. This income can be perfectly used for when you go on foreign holidays for instance. By using 2 accounts If you ever do get investigated you can show what the income element is and what the capital element is.

Non dom rules can be used by millions off people in the UK, anyone that was born abroad. This might be a little bid more difficult if your Father was british, you need to research this.

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http://www.theherald.co.uk/politics/news/d...1617882.0.0.php

Peer pledges to bankroll Labour’s election campaign

CATHERINE MacLEOD, Political Editor August 15 2007

Comment

The prospect of Gordon Brown calling an early General Election intensified yesterday as it emerged that a wealthy steel magnate is willing to fund Labour's campaign.

Lord Paul, who is thought to be worth around £450m, was a major donor to Mr Brown's recent leadership campaign and he has made it clear he will give the Prime Minister whatever he can afford to fight the next election.

....

He is non-domiciled in the UK for tax purposes.

...do you think he wants everything tax wise to remain as Gordo has set it......?.... :P:lol::lol: ....."a non domiciled Lord".....that's a real mouthful ...I wonder what NuLabour will think of next ....!.. :lol::lol: ....domiciled peasants are the new growth segment under NuLabour..... :(:o

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Yes you should register with the tax office for being Non domicled. I have done this last year. Look for the DOM01 form an the HMRC website. You can have the intresest on offshore savings gross. Best is not to remit your interest to the UK but keep the interest in a seperate income offshore account. This income can be perfectly used for when you go on foreign holidays for instance. By using 2 accounts If you ever do get investigated you can show what the income element is and what the capital element is.

Non dom rules can be used by millions off people in the UK, anyone that was born abroad. This might be a little bid more difficult if your Father was british, you need to research this.

But is there actually any benefit to registering as non domiciled. Surely it just means that when they change the rules they'll be after me. I believe I already get the interest on my offshore savings gross, since I opened the offshore account whilst I was in Hong Kong and used my Hong Kong address. I have been careful to keep my offshore bank a/c and uk bank a/c(s) as seperate entities despite them being with the same bank, however I have on occasion transfered money from my offshore a/c to my uk a/c to make purchases, invest, etc.. Is there anything stopping me moving savings from my UK income/salary into my offshore savings account (after I have used my cash ISA allowance). As I say, quite often it isn't worth it as the interest gross on offshore accounts doesn't beat the interest net on some of the top savings accounts in the UK.

Thanks for your input.

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