Treasury moves to appease non-doms
Government publishes legal advice to appease non-doms
A desperate bid has been made by the government to prevent a non-dom stampede
from Britain’s shores, as small businesses were denied any further capital gains
tax reliefs.
The Treasury went to the lengths of adding a 16 page letter from an American
law firm which said that it expected the £30,000 non-dom levy could be offset
against US federal tax after jittery Americans threatened to leave the UK.
Ernst & Young’s private client partner Andrew Tailby-Faulkes said that
despite the positive noises, an element of doubt still lingered.
‘[The Treasury] is not saying it’s a done deal,’ said Tailby-Faulkes. ‘It
seems like there has been a lot of behind-the-scenes negotiations going on with
the Internal Revenue Service.’
Tailby-Faulkes described the non-dom changes as ‘extraordinary’. ‘We and many
other stakeholders called for a delay in changing the rules because they are so
complicated. We could have benefited from further consultation and refinement.’
Lenka Hennessy, tax director at Grant Thornton, added: ‘The chancellor has
back-pedalled on the non-dom rules.’
By contrast, those expecting further CGT concessions were left out in the
cold. A flat rate of 18% with a lifetime entrepreneurs’ relief of 10% on the
first £1m of business gains will still go ahead, but it will still only apply to
those with a 5% stake in the company.