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House prices trap non-doms in London
Paul Waugh, Deputy Political Editor17 Jun 2008
The expected exodus of wealthy non-doms from London has not materialised because many of them cannot sell their homes without a loss, research found today.
The downturn in the housing market is a key factor persuading wealthy foreigners to remain in Britain. And despite Alistair Darling's new taxes on non-doms, the UK's career opportunities and culture have ensured it remains one of the world's most attractive regimes, according to the study commissioned by Barclays Wealth.
Many non-doms are refusing to sell long-term property investments when they might not achieve the best price. Untaxed income can still be used to service existing offshore mortgages, but this tax break will not be available for new mortgages.
Cameron Fowler, managing director of Barclays Wealth International, said: "The non-domicile professionals are having to think harder about the decision to move to, or remain in, the UK - but the good news is most still seem to think the UK is the place to be."
The Government watered down its proposed new tax regime for non-doms after an intense lobbying campaign by the City, removing some of the most disliked changes. But it kept the £30,000 levy for foreigners living in Britain for more than seven years who wanted to keep their offshore income out of the British tax net.
The research was conducted by Scorpio Partnership, a consultancy that canvassed the view of accountants and law firms acting for at least half of the 115,000 non-doms registered with the Treasury. Mr Fowler said the changes prompted a surge in clients seeking advice.
Other countries attracting nondoms include Switzerland, Dubai and the emerging Asian economies, as well as the Channel Islands and other European countries, he said.
Reader views (3)
Are they crying into their expensive drinks?!
- John, London, 17/06/2008 18:03
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Why sell...? Rent it out...! All the people not buying need to live somewhere.
Then whiz over the channel and earn money in better managed economy. UK will get back on its feet once Darling / Brown are gone.
- Paul, Luxembourg, 17/06/2008 17:06
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Is there a relief fund we can contribute too? Poor lambs....
- Ethan, UK, 17/06/2008 14:28
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