Please don't tax me into oblivion!
October 30, 2007 11:33 AM Subscribe
UK Non Doms - what are your plans to deal with new taxes?
In the most recent round of budget proposals, George Osborne had put forward plans to levy taxes on global income for ex-pats who are resident in the UK for over seven years.
While these plans are controversial and their very legality is suspect, the December 2007 deadline has me - and many other ex-pats here in the UK - concerned.
I already pay a very large amount of tax on income that I earn here in the UK. I've got no problem with that. However I have a problem with the UK levying an excessive tax (40% or more) on money I've already been taxed on, money that I've put to productive use i.e., invested or held in liquid savings rather than used to acquire useless objects.
Apparently you can cut a deal in Holland to pay a flat 30% with a further 1.2% global wealth tax per annum. In other words, cheaper than the UK proposal. I'm hearing from colleagues The Swiss will cut deals also and in fact one buddy recently moved on this basis however data is hard to come by as each Canton negotiates separately and privately.
My wife is Dutch, I'm fortunate enough to be able to work either in London or Amsterdam and we already have a flat in The Netherlands. In terms of my own decisions, I might just go.
Some of my buddies are hopping to Hong Kong or Shanghai, where apparently there is a flat 15% on local earnings and no global taxation.
The new tax will initially be levied after seven years residence in the UK. It increases by an unspecified amount after ten years. I'm an American who has been living here almost eleven years now, so I expect to get hit - perhaps hard.
I'm not particularly happy about this. On my Indefinite Leave to Remain (UK Green Card equivalent) it clearly states "No recourse to public funds". Well, I've never taken a day of charity in my entire life. I've lived outside the United States for over one third of my adult life and in multiple countries. I can take care of myself. I didn't come to the UK then demand a flat and benefits.
I own a flat in Central London, Whitechapel, and have paid off a 25 year mortgage in less than ten years. I work full time in banking, teach finance at a University in London part time, and I'm completing a second Masters degree, an MBA this time. By every measure I'm a productive citizen and I wasn't planning to leave but truth be told, the United Kingdom is pricing themselves out of the global talent market with proposals such as this.
So what are other Non Domiciled Expats planning? And what's your view on the likelihood of this law being signed into force?
In the most recent round of budget proposals, George Osborne had put forward plans to levy taxes on global income for ex-pats who are resident in the UK for over seven years.
While these plans are controversial and their very legality is suspect, the December 2007 deadline has me - and many other ex-pats here in the UK - concerned.
I already pay a very large amount of tax on income that I earn here in the UK. I've got no problem with that. However I have a problem with the UK levying an excessive tax (40% or more) on money I've already been taxed on, money that I've put to productive use i.e., invested or held in liquid savings rather than used to acquire useless objects.
Apparently you can cut a deal in Holland to pay a flat 30% with a further 1.2% global wealth tax per annum. In other words, cheaper than the UK proposal. I'm hearing from colleagues The Swiss will cut deals also and in fact one buddy recently moved on this basis however data is hard to come by as each Canton negotiates separately and privately.
My wife is Dutch, I'm fortunate enough to be able to work either in London or Amsterdam and we already have a flat in The Netherlands. In terms of my own decisions, I might just go.
Some of my buddies are hopping to Hong Kong or Shanghai, where apparently there is a flat 15% on local earnings and no global taxation.
The new tax will initially be levied after seven years residence in the UK. It increases by an unspecified amount after ten years. I'm an American who has been living here almost eleven years now, so I expect to get hit - perhaps hard.
I'm not particularly happy about this. On my Indefinite Leave to Remain (UK Green Card equivalent) it clearly states "No recourse to public funds". Well, I've never taken a day of charity in my entire life. I've lived outside the United States for over one third of my adult life and in multiple countries. I can take care of myself. I didn't come to the UK then demand a flat and benefits.
I own a flat in Central London, Whitechapel, and have paid off a 25 year mortgage in less than ten years. I work full time in banking, teach finance at a University in London part time, and I'm completing a second Masters degree, an MBA this time. By every measure I'm a productive citizen and I wasn't planning to leave but truth be told, the United Kingdom is pricing themselves out of the global talent market with proposals such as this.
So what are other Non Domiciled Expats planning? And what's your view on the likelihood of this law being signed into force?
No real suggestions on what to do however I do think these new tax laws are pretty foolish - attacting non-doms to the UK has generated a lot of wealth for the UK.
posted by laukf at 12:45 PM on October 30, 2007
posted by laukf at 12:45 PM on October 30, 2007
Best answer: The relevant part of the pre-budget report is in this pdf (section 5.80 (Residence and Domicile Report). The proposal is not a tax on your global income. In fact you will have to pay a flat rate of GBP 30,000 in order to have access to the existing non-dom tax rules, which won't change in themselves.
Only you know the monetary equivalent of your current life in London - don't take it personally that some people in England don't like tax loopholes for the "ultra-rich", you've surely been here long enough to know about the politics of envy!
posted by patricio at 1:23 PM on October 30, 2007
Only you know the monetary equivalent of your current life in London - don't take it personally that some people in England don't like tax loopholes for the "ultra-rich", you've surely been here long enough to know about the politics of envy!
posted by patricio at 1:23 PM on October 30, 2007
Best answer: As mentioned here you are one of the 'average cosmopolitan millionaires' rather than one of the billionaires that the popular mind would like to see dunned by these levies. The policy is ill thought out by both sides as it will drive out the sort of person like yourself who probably benefits the wider economy more than the likes of Abramovich and Al Fayed. First stop should be a taxation specialist but I think that it is unlikely that the rules will really go into force in their current 'one size fits all' form. You might also try talking to HR at your employer to see what their opinion is - no doubt this is being looked at carefully to see what can be done to protect superstar traders etc.
posted by zemblamatic at 1:26 PM on October 30, 2007
posted by zemblamatic at 1:26 PM on October 30, 2007
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posted by biffa at 11:38 AM on October 30, 2007