Once In A While, Common Sense Triumphs Over Political Posturing.

It is a relief to see that the UK Government has, in its 2008 budget backed down from implementing some of the draconian measures threatened against those non-domiciles who are tax residents of the UK. What is left in the UK budget will not be welcome to them but it could have been a lot worse.

The threat to impose a deemed domicile status and taxation on full world wide income has disappeared, as has the prospect of a step up in the level of charge after a fixed number of years. What is left is the charge on worldwide income after seven years of UK tax residence unless the non-dom pays up a fee of £30,000. The fee has been dressed up as a tax to make sure that most other jurisdictions (particularly the USA) will give credit for the fee in calculating any home tax liability.