New tax hits Britain's attraction as centre of global finance
London (PTI): Indian and other foreign-origin high net worth individuals here are being courted by tax havens to move there after Britain imposed a 30,000 pound tax on people claiming non-domicile status.
Chancellor Alistair Darling's announcement during the budget speech prompted a flurry of activity with tax consultants and representatives of tax havens such as Monaco, Lichtenstein and Geneva advising clients on the next move.
The tax of 30,000 pounds is unlikely to make a difference to the super-rich such as steel baron Lakshmi Mittal, but many among the 23,000 individuals who claim non-domicile tax status are considering moving out of Britain.
Critics of the tax on non-domicile people better known as 'non-doms' include top figures of British trade and industry, and the Trade minister Lord Digby Jones. They believe the tax threatens London and Britain's attractiveness as a global financial hub.
Describing the tax as 'laughable', Liberal Democrat leader Nick Clegg said: "Their new poll tax which the Conservatives not surprisingly support, will be wildly punitive for ordinary foreign workers but will be no more than a 'flea bite' for foreign billionaires who have come to regard the UK as nothing more than a tax haven."
The non-domicile rule is a tax loophole that made Britain a tax haven and a favourite destination for the world's super-rich, industrialists and businessmen. It was framed during the days of the British Empire.
It allows some residents of the UK to cite another country as their real domicile and then, unlike all other residents, to pay UK tax on their earnings in the rest of the world only if they remit the money to the UK. If they do not remit it to the UK, no tax is levied.
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