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Non Dom/private Equity Casualty

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I was at a sports game this morning at my daughter's school. I was talking to one of the other dads, a Danish guy who works for a consultancy company that mainly supports private equity funds. He's just put his house on the market (Chobham in Surrey) and is leaving the UK, private equity deals have dried to a trickle and the non dom tax is the last straw, he plans to beat the exodus and secure a similar job in continental Europe. Maybe he's not quite been quick enough, the EA told him he's had four big detached houses in the last week all from non doms bailing out.

I'd assumed this crash would echo what I saw in 1989/95, where prices were falling but desirable properties were still rarer than hen's teeth, maybe I was wrong.

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I was at a sports game this morning at my daughter's school. I was talking to one of the other dads, a Danish guy who works for a consultancy company that mainly supports private equity funds. He's just put his house on the market (Chobham in Surrey) and is leaving the UK, private equity deals have dried to a trickle and the non dom tax is the last straw, he plans to beat the exodus and secure a similar job in continental Europe. Maybe he's not quite been quick enough, the EA told him he's had four big detached houses in the last week all from non doms bailing out.

I'd assumed this crash would echo what I saw in 1989/95, where prices were falling but desirable properties were still rarer than hen's teeth, maybe I was wrong.

Whether this is the correct move for the government or not, I just can't feel sorry for these people.

At the end of the day, now they simply have to pay tax on all their earnings like most UK citizens. And in fact if they are rich enough they get to pay less, by choosing the fixed charge.

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Whether this is the correct move for the government or not, I just can't feel sorry for these people.

At the end of the day, now they simply have to pay tax on all their earnings like most UK citizens. And in fact if they are rich enough they get to pay less, by choosing the fixed charge.

Some I do feel sorry for, they're facing a £30k bill for each member of their family, but of all the ones I know there's not one whose skills can't be replaced by a Brit, consequently I don't see how it spells disaster for the UK. British regulations are still more accomodative than in any other major financial centre.

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Whether this is the correct move for the government or not, I just can't feel sorry for these people.

At the end of the day, now they simply have to pay tax on all their earnings like most UK citizens. And in fact if they are rich enough they get to pay less, by choosing the fixed charge.

Just to be entirely clear:

Non-doms pay tax on their UK earnings just to everyone else.

The difference is that any money they earn OUTSIDE the UK they don't have to pay UK tax on. They would have to pay UK tax on it if they wanted to bring it IN to the UK however.

So if a Dutchman has savings in a banking account in Jersey, say he doesn't have to pay tax on the interest on those savings, but would have to pay tax if he wanted to bring them in to the UK. In any case he will pay normal UK tax on his UK salary, and on any income earned in the UK (e.g. on interest earned on an on-shore bank account)

None of this seems at all unreasonable to me.

If I went to live in France, I wouldn't expect to have to pay French tax on interest I earned on my UK bank accounts.

Edited by daedalus

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If I went to live in France, I wouldn't expect to have to pay French interest on money I earned on my UK bank accounts.

You may not expect it, but the French government does:

http://www.frenchentree.com/france-tax-adv...cle.asp?ID=2250

http://www.franceaccountants.com/tax.html

etc..

From what I know, the UK is quite unusual in not taxing worldwide income from the day people become resident. Don't forget that we have dual tax treaties with most countries though, so people can claim a tax credit for tax paid in other jurisdictions.

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I'd assumed this crash would echo what I saw in 1989/95, where prices were falling but desirable properties were still rarer than hen's teeth, maybe I was wrong.

Not a gazillion miles from Chobhan here, and there are most certainly a few Really Nice Houses cropping up for sale, some of which are currently empty. Makes one wonder...

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Just to be entirely clear:

Non-doms pay tax on their UK earnings just to everyone else.

The difference is that any money they earn OUTSIDE the UK they don't have to pay UK tax on. They would have to pay UK tax on it if they wanted to bring it IN to the UK however.

So if a Dutchman has savings in a banking account in Jersey, say he doesn't have to pay tax on the interest on those savings, but would have to pay tax if he wanted to bring them in to the UK. In any case he will pay normal UK tax on his UK salary, and on any income earned in the UK (e.g. on interest earned on an on-shore bank account)

None of this seems at all unreasonable to me.

If I went to live in France, I wouldn't expect to have to pay French interest on money I earned on my UK bank accounts.

Ahh but you would, you'd pay tax at the french rate but not pay any tax in the uk. Its covered by reciprocal taxation laws so that you are not double taxed. America, germany, france, japan, etc, treat residents all in this way. Its only the uk that is different.

What the non-doms are doing is stashing income in zero or low tax tax-havens. However they generally don't want to live in these places, nor can many find work there, so they are using uk tax laws as a loophole. This way they can have their cake an eat it, i.e. live in a modern western civilization, but then have much of their income, particularly if they are rich, treated as if they live in a third world country. The vast majority of modern societies do not allow this loophole, however we historically have.

If they are not rich then it has little effect, they simply pay uk tax on worldwide income. However much it may be. Personally i think we should be brought into line with the rest of the world by taxing worldwide income after they are resident for 2-3 years. If they don't like it they can leave. And do without all the amenities of london.

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The Millions plus property will stay that way.... the v rich will get what they want, and can have what they want.

The £500 to £900k will pull the market down, not a property the mega rich would aspire to, but others if they could afford it, and could borrow it, would aspire to own if they could. ;)

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If they are not rich then it has little effect, they simply pay uk tax on worldwide income. However much it may be. Personally i think we should be brought into line with the rest of the world by taxing worldwide income after they are resident for 2-3 years. If they don't like it they can leave. And do without all the amenities of london.

BUT THEY PAY INCOME TAX ON THEIR UK EARNINGS

AND IF THEY GO ABROAD THEN THEY WON'T

It is fine to whinge about this being unfair, but to be honest, if they go, we'll get less tax from them, and then we'll all suffer income tax increases to compensate. This does rather seem like biting off the nose to spite the face.

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BUT THEY PAY INCOME TAX ON THEIR UK EARNINGS

AND IF THEY GO ABROAD THEN THEY WON'T

It is fine to whinge about this being unfair, but to be honest, if they go, we'll get less tax from them, and then we'll all suffer income tax increases to compensate. This does rather seem like biting off the nose to spite the face.

thats saying they go, since almost all the places they'd like to live, and/or can work in tax worldwide income. Its why they came to the uk in the first place. So the choice is generally pay more tax, or leave (costly) and severe ties to the uk (socially difficult) and pay even more tax, or leave (costly) and severe ties to the uk (socially difficult) and live in a tax haven (many cases, undesirable, unable to work, etc).

Every special interest group screams and complains that its treated unfairly when its tax burden is increased (and this is one example where this is clearly not the case). They make all kinds of threats, which in this case means leaving, and a few will but it'll amount to nothing more than that. After all where can they go and have a playground comparable to london, that won''t tax them the same or even more.

Also if they do leave i'm sure there's a uk citizen in the wings that'll take the job, and pay exactly the same amount of uk tax. Pretty much a no lose situation for the uk whatever the non-doms say.

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Fine, long as l can move all my cash to a low/zero offshore account and only pay tax at that offshore rate on interest earned....wassatyousay? I can't? Sounds unfair to me.

That 30k per child thing is also a bit of dramatic misdirection. Surely if you had a kid that had no worldwide income except a cheque from auntie Von Klaptout for 12 euros and 50 eurocents every christmas, then surely you simply opt to pay tax on worldwide income..which would be zero.

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Fine, long as l can move all my cash to a low/zero offshore account and only pay tax at that offshore rate on interest earned....wassatyousay? I can't? Sounds unfair to me.

That 30k per child thing is also a bit of dramatic misdirection. Surely if you had a kid that had no worldwide income except a cheque from auntie Von Klaptout for 12 euros and 50 eurocents every christmas, then surely you simply opt to pay tax on worldwide income..which would be zero.

the 30k per child is just scare mongering by very rich non-dom VI's. its an attempt to infer that a non-dom with a couple hundred k income, family of 4 (or similar), will pay 120k tax. At most they as a family pay tax on worldwide income same as the rest of us. If they earn enough where paying 30K each is less money, they have so much its not going to be at all close to putting them in the poor house.

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I wouldn't say it is a cause of a disaster, but it is definitely a symptom.

if the only way you can entice skilled foreign workers to live in your country is through a sort of bribe, then that might indicate that there are problems enough to worry about.

as for a UK citizen being able to replace them, that's true enough. but you end up with a pool of workers to choose from that is limited to the people that legally can't flee.

diversity in the workforce, especially in highly skilled highly paid jobs isn't necessarily a bad thing.

its like comparing a company that can hire the best workers in the world to do something, vs one that can only hire from their own national workforce, especially one that isn't all that large of a country.

the one with the broader choice of workers is probably going to do better in the long run, which usually means a better economy and more jobs etc.

how good would Man U be if they could only hire players born in Manchester? Especially if all the other clubs could still hire the best from all over the world.

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Note that the OP said that the non-dom tax was 'the last straw'

I wonder if this tax reform will be blamed for all of the problem. Underlying this is the credit crunch and the falling business in private equity.

Its easy to blame the government when its probably the wbankers that are really to blame. (Even though I dislike the government, debit where debit's due...

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I was at a sports game this morning at my daughter's school. I was talking to one of the other dads, a Danish guy who works for a consultancy company that mainly supports private equity funds. He's just put his house on the market (Chobham in Surrey) and is leaving the UK, private equity deals have dried to a trickle and the non dom tax is the last straw, he plans to beat the exodus and secure a similar job in continental Europe. Maybe he's not quite been quick enough, the EA told him he's had four big detached houses in the last week all from non doms bailing out.

I'd assumed this crash would echo what I saw in 1989/95, where prices were falling but desirable properties were still rarer than hen's teeth, maybe I was wrong.

Oh no how will the UK survive without this non-tax payer. Where can we replace his paper shuffling skills? Oh my God we are doomed.

Personally I think lets get rid of any tax dodger then once the pound is damned cheap manufacturing will be able to rise up again.

Still trying to look for employment in a stress free position in New Zealand.

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Oh no how will the UK survive without this non-tax payer. Where can we replace his paper shuffling skills? Oh my God we are doomed.

Personally I think lets get rid of any tax dodger then once the pound is damned cheap manufacturing will be able to rise up again.

Still trying to look for employment in a stress free position in New Zealand.

http://www.citymayors.com/business/stress_survey.html

Not that much different than the uk unfortunately.

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I wouldn't say it is a cause of a disaster, but it is definitely a symptom.

if the only way you can entice skilled foreign workers to live in your country is through a sort of bribe, then that might indicate that there are problems enough to worry about.

as for a UK citizen being able to replace them, that's true enough. but you end up with a pool of workers to choose from that is limited to the people that legally can't flee.

diversity in the workforce, especially in highly skilled highly paid jobs isn't necessarily a bad thing.

its like comparing a company that can hire the best workers in the world to do something, vs one that can only hire from their own national workforce, especially one that isn't all that large of a country.

the one with the broader choice of workers is probably going to do better in the long run, which usually means a better economy and more jobs etc.

how good would Man U be if they could only hire players born in Manchester? Especially if all the other clubs could still hire the best from all over the world.

In truth there is nothing stopping a company in the uk from hiring a non-uk citizen. However as you so rightly put it they should not be able to be hired though a sort of bribe. If they are so valuable, then the company would pay them more to counterbalance any loss due to closure/partial closure of the tax loophole. If the company is not willing to pay them more, then clearly they are not as valuable to the uk as they make themselves to be, and so are readily replaceable by a uk worker if they do leave.

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In truth there is nothing stopping a company in the uk from hiring a non-uk citizen. However as you so rightly put it they should not be able to be hired though a sort of bribe. If they are so valuable, then the company would pay them more to counterbalance any loss due to closure/partial closure of the tax loophole. If the company is not willing to pay them more, then clearly they are not as valuable to the uk as they make themselves to be, and so are readily replaceable by a uk worker if they do leave.

I agree (mostly :lol: ) and expect to see them paid more in the future.

there might not be as much demand currently, as we are heading for a slump, but for the foreign workers that definitely have the skills, they should see an increase in pay once the loop-hole closes.

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Just to be entirely clear:

Non-doms pay tax on their UK earnings just to everyone else.

The difference is that any money they earn OUTSIDE the UK they don't have to pay UK tax on. They would have to pay UK tax on it if they wanted to bring it IN to the UK however.

So if a Dutchman has savings in a banking account in Jersey, say he doesn't have to pay tax on the interest on those savings, but would have to pay tax if he wanted to bring them in to the UK. In any case he will pay normal UK tax on his UK salary, and on any income earned in the UK (e.g. on interest earned on an on-shore bank account)

...

What if the Dutchmann has Dutch income as well. Is this taxfree for him as well if he is living in the UK as long as he doesn't move back to Holland?

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Guest DissipatedYouthIsValuable

Whatever happens in my life, one thing is certain.

I will never pay tax to the French.

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They set up a shell company in tax haven, employ themselves as a consultant to it, company in UK pays shell , shell buys house in UK or invests in companyand rents it out to them. They pay no UK tax.

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Guest DissipatedYouthIsValuable

I say we invade Switzerland. Their penknives are no match for an army with almost a pair of boots per soldier.

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They set up a shell company in tax haven, employ themselves as a consultant to it, company in UK pays shell , shell buys house in UK or invests in companyand rents it out to them. They pay no UK tax.

Exactly.

Bottom line what have the non doms actually done for the economy of the UK? Private Equity - of the type we've seen has probably screwed more people's jobs than it has created and screwed more businesses. Real reason for pissing off is probably more to do with the collapse of the money tree from which these type of people hang, not tax. The plague of locusts will be off to some other land where their miracle economics has not already turned sour.

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Exactly.

Bottom line what have the non doms actually done for the economy of the UK? Private Equity - of the type we've seen has probably screwed more people's jobs than it has created and screwed more businesses. Real reason for pissing off is probably more to do with the collapse of the money tree from which these type of people hang, not tax. The plague of locusts will be off to some other land where their miracle economics has not already turned sour.

The only way I'd make exceptions for non doms would be if they were top of their class, engineers, scientists and doctors.

Private equity guys? I'd give them a lift to Heathrow.

Anyway sounds as though their (unsound) business model has failed and they are trying to blame government.

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What if the Dutchmann has Dutch income as well. Is this taxfree for him as well if he is living in the UK as long as he doesn't move back to Holland?

I'd expect that it would generally be tax free under UK taxation, but might be liable for Dutch taxation unders some circumstance.

But I'm not an expert on all the details of UK tax rules!

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  • 292 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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