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So near non-dom, so far
Posted 17/04/2008 by Alex Novarese
At last, after months of searching for a US lawyer who was about to relocate across the Pond in protest at Alistair Darling’s cack-handed assault on the non-dom community, it appeared that Legal Week’s news team had at last located one such individual.
No, not from the Canary Wharf, despite the steady stream of grumbling that’s been emerging from Skadden Arps Slate Meagher & Flom, but from a senior finance lawyer who had decided that enough was enough, sources said.
Since City desks across the land (well, London) has been searching for just such a mythic beast for months with no success, it seemed a scoop indeed. After all, followers of the non-dom saga have been repeatedly told that hundreds of irritated rich people have their bags packed but, inconsiderately for journalists, have refused to actually get on the plane.
In the meantime, while everyone has been looking at the residents of Mayfair for a departee, a FTSE 100 company, pharmaceuticals group Shire, has stolen their thunder by announced that it is moving its headquarters to Dublin, sort of the corporate equivalent of going non-dom.
Anyway, a space duly cleared on the front page, our reporter closed in and finally located our man who informed us that, yes, the requirement to make non-domiciled residents pay a £30,000 levy or face full local taxation was a factor. But not for him - more for his non-lawyer wife, who is employed in a profession that pays a good deal less than corporate lawyering.
Somehow, breaking the news that the City faces an exodus of non-dom teachers didn’t quite hit the spot, but the search goes on.
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Comments
Well said John Stansbury.
It's a shame rich envy journalists don't get it, and your posting has honed in on what are the real issues. The non-dom tax is completely misguided and will hardly be noticed by those who are ACTUALLY rich. The rest of us (without the means to move countries on April 5) will have to bide our time and then move when we can.
Posted by Anon | 21/04/2008
Actually Alex, this situation has struck the nail exactly on the head for the "little guy" caught up in this class warfare battle. What is overlooked in the non-dom fiasco is that the vast majority of non-doms are not rich investment bankers, but a hodge-podge of professionals toiling in jobs such as teachers, recruiters, in-house functional roles, consultants, and the like. Many of the non-doms are two-income families who would be subject to a £60k tax for the "privilege" of living, working, and paying taxes on their local income here in the U.K. (which in most cases are higher than those in their home country). As dual U.S. and U.K. citizens, my wife and I are waiting to see how dual taxation of capital gains and interest are going to be handled before making our "fight or flight" decision. If sanity prevails and our little sub-group is given full credit for taxes paid on our U.S. investment income, then we may hold our nose and decide to stay as the incremental increase in cost wouldn't overcome the hassle factor of moving. But there will be no overcoming the negative feelings generated by the non-dom bumbling and I fear that the long-term negative impacts on London as a welcoming home for finance may be significant. And who will be left to pick up the loss in tax revenue? I think we all know the answer to that question....
Respectfully submitted,
John Stansbury
Posted by john stansbury | 20/04/2008