Increased remittance charge 'symbolic', advisors say
The increased remittance charge for long-term resident non-doms is unlikely to bring in significant revenue, advisers say
THE PROPOSED higher charge to non-domiciled individuals for income brought into the UK is “symbolic”, advisors have said.
Currently, non-domiciled individuals have the choice to be charged UK rates on their capital gains and overseas income that are remitted to the UK or pay a £30,000 “remittance” basis and pay no tax on overseas income brought to the UK.
The government announced plans in the Budget to raise this charge to £50,000 for non-domiciles who claim the remittance basis and have been UK resident in at least 12 of the 14 tax years prior to the year of the claim.
A Treasury consultation last week said the government “believes that those who have been here the longest, enjoying the benefits offered by the UK’s economy and society, should make a greater contribution than the current £30,000 charge to reflect their closer connection to the UK”. This will take effect from 6 April 2012.
The £30,000 charge will be retained for those who have been resident in at least seven of the nine years prior to the year of claiming the remittance basis, but fewer than 12 years, the consultation said.
This higher charge is expected to yield £80m a year for the Exchequer, the government said.
But David Kilshaw, chair of private client at KPMG, said this is unlikely to raise significant revenue. “It is perhaps more a symbolic gesture to demonstrate that non-Dom individuals are contributing their fair share to the Exchequer,” he said.
Matt Coward, a partner at Price Bailey, said the charge was “unlikely to put off those contemplating coming to the UK to live, invest or work”. However, he added, “nor is it likely to raise anything more than a nominal amount of extra tax”.
