Brown's haven for non-doms

The question of whether or not individuals should be allowed to be resident
in the UK, but not domiciled, has often caught Gordon Brown’s eye.

It seems to have been parked, however. At the Chartered Institute of
Taxation’s debate a fortnight ago, politicians all trotted out the same old
point: that closing the loophole would mean the non-doms would leave.

Lakshmi Mittal’s benevolence to the Labour Party, as well as key donors to
other parties, may well explain much of the reticence.

But there are a couple of questions worth asking.

Where exactly would the nom-doms go? No doubt there would be a marginal tax
advantage in other jurisdictions, but is there anywhere that lets them keep
millions offshore sheltered from tax, as long as it isn’t remitted to the UK?

The other point is for Brown himself. The chancellor has been lecturing the
world on tax havens. He understands the international dimension of avoidance,
and the mobility of capital.

So why doesn’t he understand that the UK is itself a tax haven by virtue of
these rules? It may cost him money to close the loophole, but it presumably also
costs the Channel Islands money when the EU, through its savings directive,
makes it more difficult for people to stash money offshore there: cost is no
defence.

The issue raises a critical question about Brown as a politician and about
his attitude to tax avoidance: is it principled, or opportunistic? The next
pre-Budget report may give us some idea which camp Brown falls into.

Alex Hawkes edits the tax page