Friday, October 19, 2007



I am surprised how little comment either the Conservative party tax proposal to charge a £25,000 annual fee to non-UK domiciled individuals, or Alistair Darling’s annexure of that policy but with a £30,000 fee and a £1,000 de minimis exemption, generated. All that I have seen is a squabble between Conservative and Labour as to how much such a charge would raise – with both sides pointing out that no one knows how many non-domiciled people there are in the country. Also, sadly,(as I am a member of the Society of Trust and Estate Practitioners) I also saw something from within the STEP leadership welcoming the proposals.

The number of non-doms is certainly more than the figure of 110,000 that has been bandied about. I would think it is in the region of 10 million. Anyone who was born overseas, or whose parents were born overseas, and hopes one day to return to their home country (or, indeed, to retire somewhere else outside the UK) is likely to be non-domiciled. I suspect that embraces the vast majority of immigrants over the last 50 years. Of course many of that 10 million achieve no tax benefit from their non-dom status as they do not have overseas income or gains.

On the other hand many of them do have little bits of overseas income. This particularly applies to those from countries with a concept of family money, most of which tend to be in the Indian sub-continent and the Far East. Such people have often inherited jointly with their siblings a property or other asset from their parents and allow a brother or sister in their country of origin to collect their share of the rents and use it as he or she thinks fit – often towards the support of other family members who remain in that country of origin.

Accordingly the joint Conservative/Labour party policy actually seems to be that the poorer immigrants who allow their income in their home country to be used to support needy relatives at home should be required to pay tax on such income even though for social reasons it is never going to be available to them, but that the ultra-rich should be able to pay a fee in order to purchase special tax privileges.

It is even sadder that Alistair Darling decided to adopt this squalid Tory proposal. This must be the first time ever that the Labour party has put itself firmly behind the 19th Century concept that the rich deserve respect from the rest of us and that it is only right that the working classes, the traditional base for “Old Labour”, should defer to privilege rather than looking for equality and should accept that the rich should be entitled to all of the tax privileges that their money can buy.

Am I the only one who finds this abhorrent? Firstly, any tax charge that is likely to impact mainly on non-white immigrant families is, to my mind, clearly racist and accordingly seems to position both of the main political parties in a place formerly occupied mainly by BNP and National Front supporters and the more intolerent end of the “Sun” readership.

Secondly, most Conservative supporters look back nostalgically to Thatcherism, a period in which the government sought to provide opportunities for people to stand on their own feet and to reward those who grasped such opportunities without too much concern for the well-being of those unable to do so. Many feel that a return to Thatcherism tempered with a far greater concern for those unable to stand on their own feet (usually because of either health problems or failures of the State education system) would be attractive.
Sadly, David Cameron and George Osborne seem to have looked back somewhat earlier for inspiration. My recollection (from the days I studied history at school fifty years ago), is that the Osborne/Darling system of allowing the rich to purchase privileges from the Crown, but requiring the poor to comply with the obligations that the rich had bought their way out of, started to fade with Magna Carta and was wholly defunct by around the end of the Fifteenth century. Such a system ought to be left in history! It has no place in modern day Britain.


Blogger Andrew said...

Well said, sir. As another tax adviser who aspires to the knowledge, expertise and sincerity displayed by the blog author, it is a shame only that he does not feel able to be more active or vocal in such matters.

If those at the respectable end of the professional market were prepared to contribute more, the quality of the debate might be improved. Any improvement is much needed.


6:54 am  

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