No Review Of UK Tax Domicile Rules Yet

by Robert Lee, Tax-News.com, London

15 October 2002

The Guardian newspaper reported on Monday that consultations on possible changes to the UK's tax rules for non-domiciled residents, promised in the Chancellor's spring budget, have not yet taken place.

Following revelations that some of the UK's wealthiest foreign residents - including Hans Rausing, head of the Tetra Pak empire, Mohamed Al Fayed, owner of Harrods, and Lakshmi Mittal, the Indian steel baron - make use of a 'loophole' in UK law which allows them to claim tax domicile in the place of their birth and thus avoid UK taxes on their income, Gordon Brown stated that:

'The government is reviewing the residence and domicile rules as they affect the tax liabilities of individuals. As this is a complex area, all those affected should have the opportunity to contribute to the discussion. The government will report on this issue in time for the pre-budget report.'

However, the Guardian revealed on Monday that: 'Treasury sources said there is no chance that the consultation can take place before the Chancellor's report, due at the end of next month,' blaming: 'intense lobbying by Greek shipping millionaires and a handful of specialist financial advisers' for the delay.

Recommended